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gentleman2222's avatar

Where do you suggest putting some cash in the US for interest yield but without the risk of stocks, mutual funds or ETF?

Asked by gentleman2222 (29points) December 10th, 2017

Where do you suggest putting some cash in the US for interest yield but without the risk of stocks, mutual funds or ETF?

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7 Answers

RedDeerGuy1's avatar

To start I would save $5,000 in a high interest savings account. To at least one years worth of savings for an emergency account. Before you start playing on the stock market. Low yield savings bonds are good . Only buy stocks if you can afford to lose that investment. I am not a financial expert.

elbanditoroso's avatar

US Interest rates are pretty awful, and have been for years.

That said, there are several banks that are offering in the 1.40 and 1.45 range these days, which appears to be as good as you can find for Money Market or similar accounts.

(CDs are paying more, of course, but your money is tied up for a couple years.)

Among the banks paying decent interest: (this is not a complete list, and check the latest rates for yourself)

Purepoint 1.40
Ally 1.25
GS Bank (Marcus) 1.30
Barclays US 1.30
Live Oak Bank 1.45
Dime Savings Bank 1.30

CWOTUS's avatar

Welcome to Fluther.

There are no high-interest and safe investments in cash in the USA. Not. Any.

Furthermore, no dollar-denominated investment, no matter how safe it appears to be, can be fully shielded from the risk contained in the stock market (which includes as a subset all US-based mutual funds). That’s because everything in the financial markets is interdependent; shocks felt in one segment will translate into other segments (sometimes in the opposite direction; that’s true). For example, a steep and prolonged drop in the overall values of stocks (which doesn’t happen on a whim or a rumor, that is) will cause cash itself to become more valuable, and that includes bonds and blue-chip stocks that pay dividends. So the bonds will appreciate in value, which will make their returns (based on your cost of investment) worth less… but still, safer at that point than stocks.

As @elbanditoroso has noted, the best interest-bearing accounts in the US money market still pay less than 1.5% interest per annum. That doesn’t even match inflation, which is also at historically low levels (but won’t stay there).

The best investment you can make at this point, or at nearly any point, is in your own education and understanding of these topics. Because another lesson you will need to learn to be a successful investor is to not rely too much upon advice from anonymous folks on the internet.

LostInParadise's avatar

If you want a decent rate of return over an extended period of time, stocks are the way to go. A mutual fund, particularly an index fund, will do well in the long term.

ARE_you_kidding_me's avatar

I agree with CWOTUS, there are no safe havens that offer real gains. I diversify in ETFs, no load mutual funds and use a dividend growth strategy with single stocks. I also keep a tight group of short-term but high performing stocks that I manage like my own mutual fund. The bottom line is when things are rolling be there to snatch up gains and have a place to park everything like a couple of money market accounts when times suck. If you just park your money and do not yet have enough to retire then you are actually slowly losing it as there are zero places to keep it risk free that even keep up with inflation.

kritiper's avatar


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