I have about $60k saved up in a checking account. No HYSA or Debt at all. I’m trying to figure out the best way to use and grow this money while still keeping it available for near-term goals.
Here’s my situation:
• I’m considering either leasing or buying a new Ford Ranger.
• I plan to rent an apartment for about a year.
• I’d like to buy a house within the next year.
• I also have a 457(b) and a Roth IRA that I could contribute more to.
I’m not sure where I should keep this money in the meantime so I can still access it for the car and house but also make smarter use of it than just leaving it in checking. Any advice would be greatly appreciated.
Posted by lil_pay
13 Comments
If you want it for a car or a down payment within a year open a HYSA and park it in there for the time being.
HYSA because you may need it in the near future (1-3 years)
To clarify, under $10k on credit cards from this month, paid off every month, or are you carrying credit card debt month to month?
It should at least be in a HYSA while you figure out what to do, but you have to figure out whether you’re spending soon or saving for the long term.
A quick chat with AI says putting that money in a high yield savings account makes you $225 / month.
With respect to availability it’s only a transfer away.
Everybody’s downvoting me but $225 / mo in interest off $60K at today’s HYSE is almost dead on.
a HYSA is the way to go. I would recommend Wealthfront as its 4% APY and always one of the highest. Withdraws are same day and you can even get a debit card with it.
Get that out of checking ASAP! Even a savings account would make you $2500 this year.
Keep house money safe – HYSA or CDs. Don’t risk it in stocks if you need it soon.
Max your Roth IRA first though – that’s free money you can’t get back later.
HYSA is your best bet. Every other investment vehicle either limits your withdrawal in the short term, or involves timing the market in some risky way. I use Capital One and had 60k in there recently, was getting 200 a month in interest
HYSA. Find the highest interest account and plop it there while you plan your next steps. It’s free money. Do it today.
Paying down credit card debt can be very productive depending on the interest rate and credit limit.
Next, put that money to work while it’s growing. Put 20K into a high yield savings account @ 4.5% annual yield.
You said you needed access to the funds, so we’re going to be leaving 10K in your savings / checking account for ready instant access without having to pay an instant access fee.
With the remaining 30K (or less if you paid down cards for extra cash availability over time) you can look to invest. My personal rule is to never allocate more than 30% of my money in stocks if I need it in the short or medium term.
GL;HF friend, I wish we could talk longer
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I would have it in a high savings account for sure. And I just enough money for monthly bills in the checking account.
There are many, many people who can’t or aren’t paying their mortgages right now due to job losses or what have you, if you are serious about buying then keep waiting, it’s going to get really bad out there pretty soon
HYSA or Money market. Both will pay higher interest rate than the checking account and you’d have access to the cash typically in 2 or 3 days of initiating a transfer to your checking account.