#1
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Emergency Fund: Why Money Market??
The financial advisors who gave a seminar at my college this weekend said the same thing.
Why not keep emergency funds in a high-yield savings account, rather than one which "seeks to maintain a stable share price"? Or even a checking account, which is at least FDIC insured? |
#2
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Re: Emergency Fund: Why Money Market??
[ QUOTE ]
The financial advisors who gave a seminar at my college this weekend said the same thing. Why not keep emergency funds in a high-yield savings account, rather than one which "seeks to maintain a stable share price"? Or even a checking account, which is at least FDIC insured? [/ QUOTE ] Vanguard has pretty good rates on their money market accounts, usually higher than all those high-yield savings accounts. And they're not promo rates or anything. I can sleep at night knowing it'll be $1/share tomorrow. I think having the fund is far more important than what you have it in. MMA/CD/savings, who cares. |
#3
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Re: Emergency Fund: Why Money Market??
I guess they just give you more shares at $1 a share then?
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#4
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Re: Emergency Fund: Why Money Market??
yes
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#5
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Re: Emergency Fund: Why Money Market??
most people don't realize that at today's rates, savings accounts are at 5%+. There is also some fear among older people to invest in an online bank.
In my personal finance class, I brought this same idea up and he was basically like "what savings account could get 5%?" and he was like, "oh.....INTERNET bank". But yeah, they're essentially the same. Also, a checking account is a bad idea, because you want to make some money on your money, but not so much money that you risk losing your emergency fund. |
#6
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Re: Emergency Fund: Why Money Market??
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#7
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Re: Emergency Fund: Why Money Market??
[ QUOTE ]
Put it in a bond fund like the one below? https://flagship.vanguard.com/VGApp/...FundIntExt=INT [/ QUOTE ] I keep most of my spare ready-to-go cash in an ultra-short bond fund. The above is just a short-term bond fund so it may have more fluctuations. Doesn't make it bad, though. Just realize if interest rates twitch the fund price may twitch the other way a bit more in a short-term fund than an ultra-short fund. Something like, say, MWUSX. |
#8
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Re: Emergency Fund: Why Money Market??
[ QUOTE ]
[ QUOTE ] Put it in a bond fund like the one below? https://flagship.vanguard.com/VGApp/...FundIntExt=INT [/ QUOTE ] I keep most of my spare ready-to-go cash in an ultra-short bond fund. The above is just a short-term bond fund so it may have more fluctuations. Doesn't make it bad, though. Just realize if interest rates twitch the fund price may twitch the other way a bit more in a short-term fund than an ultra-short fund. Something like, say, MWUSX. [/ QUOTE ] Yeah, I'd be pretty comfortable with small fluctuations in an emergency fund short term. I think the worst year ever was like -.1% for the fund which is acceptable. |
#9
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Re: Emergency Fund: Why Money Market??
Like bay, I'm a proponent of ultra-short bond funds. I personally use SWYSX.
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