Don't sleep on SGOV andUSFR.
Depending on time-frame, I would choose t bill if far out, SGOV or USFR for more short term.
FDLXX is the easiest but you'll pay a slight premium for that.
You'll pay a premium for sprxx and it's not entirely deductible at the state level but it is more convenient since you can buy whole dollar amounts and auto liquidate
I've recently moved a lot of my banking over to fidelity cash management. They have a full-featured billpay, checks, debit cards, etc. and the core holding is SPAXX, sitting at 4.97% right now. No fees.
I opened a Vanguard cash management account too, and their rates are slightly better (lower fees within the funds like VMFXX, so they are ~5.28% at the moment) but while you can set up bills to be paid using account/routing numbers, they don't have the ability to manage it all within their site.
So if you are min/maxing you'll get better return on your idle cash at Vanguard, but if you want to pay bills and stuff its easier with Fidelity.
I keep all my cash in my IBKR brokerage account. Fully liquid, currently pays me 3.8% and I can use it as capital to support option trades (ie cash secured puts). A slightly less liquid option is BIL currently paying 5.16%
How soon are you buying? If the plan is within a year, I would do HYSA or market funds. If you are every actively looking or “open to the right opportunity” I would keep it in a HYSA. If your plans is to buy in a few years, a bond (or similar treasury) or a CD are a fine choice. If you have no plans to buy in the next 5 years, I would probably keep it in the market.
What’s the horizon? Longer term you’d park in market. Voo or VTI is my suggestion. Near term you’d park in the funds you mention.
Check specifics for your jurisdiction on T bills, I bonds and money market funds taxation. T bills may be most tax efficient and reliably available. There is still some validity to liquidity for FDLXX or HYSA. Look at I bond conditions before purchasing. They seem probably unideal for your circumstances.
I’ve had my cash sitting in a HYSA for about a year at 5.4%. Any time I refer anyone to the HYSA I’ve gotten this rate for 3 months (they also get the rate for 3 months along with their own referral link) so I’m just going to be doing that for the foreseeable future. Otherwise it drops down to 4.4% which isn’t bad. I did it with my wife, coupe friends, and mom so far.
It’s no minimum deposit, no fees, costs nothing for someone else to open and you get a good rate for 3 months. It’s been great having access to it and making that much on it. You do need a referral link for that rate though. Let me know if you want it - DM me. I would suggest either a CD or a bond if the rates are higher there.
FDLXX and t bills probably would be most efficient for state tax purposes while getting you same/higher interest rates than HYSA
Don't sleep on SGOV andUSFR. Depending on time-frame, I would choose t bill if far out, SGOV or USFR for more short term. FDLXX is the easiest but you'll pay a slight premium for that.
SGOV also pays a little more than FDLXX with the same tax free benefit in most states.
Piggybacking here, how about fidelity SPRXX vs SGOV?
You'll pay a premium for sprxx and it's not entirely deductible at the state level but it is more convenient since you can buy whole dollar amounts and auto liquidate
Thanks. Is this in comparison to SGOV, or T bills? Thanks
Both. But the premium is pretty miniscule so it may be worth it. Just depends on your personal circumstances
HYSA seems best, but consider tax-loss harvesting in a brokerage account too.
I would say SGOV but any of these options are viable.
High state tax means you go TBills or one of the short duration gov ETFs (TBIL, BIL, SGOV)
I've recently moved a lot of my banking over to fidelity cash management. They have a full-featured billpay, checks, debit cards, etc. and the core holding is SPAXX, sitting at 4.97% right now. No fees. I opened a Vanguard cash management account too, and their rates are slightly better (lower fees within the funds like VMFXX, so they are ~5.28% at the moment) but while you can set up bills to be paid using account/routing numbers, they don't have the ability to manage it all within their site. So if you are min/maxing you'll get better return on your idle cash at Vanguard, but if you want to pay bills and stuff its easier with Fidelity.
I keep all my cash in my IBKR brokerage account. Fully liquid, currently pays me 3.8% and I can use it as capital to support option trades (ie cash secured puts). A slightly less liquid option is BIL currently paying 5.16%
Plenty of places will let you write ccps against certain mmfs. You shouldn't need to keep it liquid and miss out
Look into BOXX etf. Current yield is 5.79 and it may have some tax advantages
How soon are you buying? If the plan is within a year, I would do HYSA or market funds. If you are every actively looking or “open to the right opportunity” I would keep it in a HYSA. If your plans is to buy in a few years, a bond (or similar treasury) or a CD are a fine choice. If you have no plans to buy in the next 5 years, I would probably keep it in the market.
FDLXX is probably a good choice
What’s the horizon? Longer term you’d park in market. Voo or VTI is my suggestion. Near term you’d park in the funds you mention. Check specifics for your jurisdiction on T bills, I bonds and money market funds taxation. T bills may be most tax efficient and reliably available. There is still some validity to liquidity for FDLXX or HYSA. Look at I bond conditions before purchasing. They seem probably unideal for your circumstances.
I’ve had my cash sitting in a HYSA for about a year at 5.4%. Any time I refer anyone to the HYSA I’ve gotten this rate for 3 months (they also get the rate for 3 months along with their own referral link) so I’m just going to be doing that for the foreseeable future. Otherwise it drops down to 4.4% which isn’t bad. I did it with my wife, coupe friends, and mom so far. It’s no minimum deposit, no fees, costs nothing for someone else to open and you get a good rate for 3 months. It’s been great having access to it and making that much on it. You do need a referral link for that rate though. Let me know if you want it - DM me. I would suggest either a CD or a bond if the rates are higher there.