Don't worry about this. Before moving everything out of my local credit union I kept $3,000 in a savings account that earned 0.05% because I felt I should have money locally for very easy access. We all do things to make ourselves feel better/comfortable.Now I understand a lot of this doesn't seem logical to many of you and I have no argument there. The fact is my wife wants 2 emergency funds and that's what we will have to do. It's just up to me to manage them and that's what I'm seeking help with. If you have other ideas my ears are wide open!
Sorry for the long post. I'm sure this sounds very stupid to some of you but this is the situation I'm in.
Ally Bank's Money Market Account earns 4.20% on all balances and the account comes with a debit card and checks. There is a limit of 10 withdrawals per statement cycle.Emergency fund 1: $15k in "high yield savings" 1.3% interest
Also, we need the first tier emergency fund readily available because we do have expenses that come up relatively often.
I suggest a Fidelity brokerage account and I would split the $15k into two 4-week T-bills on auto roll.Emergency fund 2 : $15k in "high yield savings" 1.3% interest
First 4-week bill $8k, wait two weeks, second 4-week bill 7k. Fidelity keeps your money fully invested in bills and the interest will build up in SPAXX (Fidelity Government Money Market Fund) which has a current yield of 4.96%.
The interest T-bills earn is fully state tax exempt if you live in a state with income tax. And if you ever need the money you can turn off the auto roll feature and on the maturity date money is available to withdraw. I have had EFTs initiated sent from Fidelity show up in an external account the same day depending on the time of day you make the transfer.
My emergency fund is in my Fidelity brokerage account split between two 4-week T-bills.
Statistics: Posted by 3000 — Mon Jun 10, 2024 1:57 am — Replies 41 — Views 2755