I have 100k in a hysa at 3.2%. It initially started at 4% but goes down all the time. I’ve been contributing into it for 2 years and it’s helped that it’s not attached to my main bank account. Once I hit 100k last year, I started putting money into Sgov. I paid taxes on the interest each year.
What is the point of using a hysa if sgov outperforms them? I’m up to 30k in sgov now and I’m wondering if I should just close the hysa and combine the accounts. I am saving up to buy a house so I’m using this money as savings rather than investing.
Hysa vs Sgov, 2-3 year timeline.
byu/Randomuser223556 inpersonalfinance
Posted by Randomuser223556
4 Comments
sgov is fine, but i’d still keep some in hysa.
house-buying money gets messy fast: inspection, earnest money, closing costs, random “need cash now” moments. sgov is good parking. hysa is good frictionless cash. use both imo.
Hysa puts your money in sgov and the bank pockets the difference
Convenience
You can walk into the bank on a whim and pull your 100k out any time the bank is open
With sgov you need to sell, wait for settlement; transfer; wait for another settlement
Brick and mortar is less likely to have “technical issues” (yours or theirs) from logging into the account
Sgov rates have also been going down; as it too follows the fed changes quickly….but sgov still beats most (non-promotional) hysa rates
Maybe your bank offers other perks like preferred loan rates or other; sgov and your broker are less likely
There’s other hysa that pays more. I use newtek which is at 4.2% but they’re not allowing new sign ups atm. Open bank is at 4% and I plan on trying them out soon.