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Optimizing my cash (again)

April 26, 2014

We are pretty cash-heavy right now, with the idea that we will eventually be looking for a home.  I did an analysis in January to compare some options to make it work just a little harder for us.  Since that analysis, the rates at PenFed dropped a bit, and it looks like Ally Bank is the winner.

Screen Shot 2014-04-26 at 11.15.21 AM

Comparing between the options, it looks like we should go with a 5 year CD if we think we’ll keep the money tucked away for at least a year.  If we are going to keep it in there much less than a year, we may as well just leave it in our savings account at .75%.

Screen Shot 2014-04-26 at 11.25.42 AM

I think we have about $100k that we’d be willing to “lock away”, but I’m wondering if I should do it in two batches, with hope that rates will improve over time.  Or is this just unnecessary?

Are there any other cash options I’m missing?

Also, I kind of can’t believe it is taking me so long to do something like this with my cash.  I’m forfeiting extra money each month!

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4 Comments leave one →
  1. April 26, 2014 11:35 am

    I didn’t realize how low the rates were in the US until I lived there. I now get about 1.8% – 2.5% in Canada (the 2.5% rates are usually promo rates running for 3 -6 months at a time)

  2. April 26, 2014 12:20 pm

    I would put it away in multiple CDs in case you need to early withdraw some, but not all?

    • April 26, 2014 3:35 pm

      Well, it is really for a down payment on a home only. Out e-fund is separate for now, just in savings. There isn’t a scenario I can think of where we would need just part.

  3. MoneySmartGuides permalink
    May 2, 2014 7:42 am

    It’s great that you are considering CD’s and doing the analysis that paying the penalty will still allow you to come out ahead. It will be interesting to see how interest rates change later this year as the Fed is tapering off of the bond buying. I am hoping for rates to inch up a little bit…I’m sick of earning less than 1% on my cash savings!

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