Personal Finance

3809 readers

1 users here now

Learn about budgeting, saving, getting out of debt, credit, investing, and retirement planning. Join our community, read the PF Wiki, and get on top of your finances!

Note: This community is not region centric, so if you are posting anything specific to a certain region, kindly specify that in the title (something like [USA], [EU], [AUS] etc.)

founded 1 year ago

MODERATORS

[email protected]

Anyone think that a site like Wealthftont is a good place to stick an emergency fund? (www.wealthfront.com)

submitted 1 year ago by [email protected] to c/[email protected]

9 comments fedilink hide all child comments

A buddy of mine told me about Wealthfront recently and they’re 5% money market account rates.

Growing up in a world where savings accounts and even CDs never approached more than 2%, the rates on this new thing blew me away.

Free money is great, and I’d love to take advantage of these rates, but the only cash I have currently is the emergency fund I’m trying to build.

Anyone have thoughts on if putting an efund in this kind of service is a bad idea? Not sure if it’ll be liquid enough if a major expense comes up.

you are viewing a single comment's thread
view the rest of the comments

[–] [email protected] 4 points 1 year ago* (last edited 1 year ago) (1 children)

Sure, why not? Here's how my emergency fund is set up:

1 months expenses next to my checking
~50% of the rest in Ibonds
~50% of the rest in t-bills

With ibond rates going down, I'm laddering into t-bills, with the ultimate goal being some bonds maturing every 2 weeks.

I currently also use my brokerage account as my bank account, which is invested in SPAXX (4.91% 7-day average APY). It provides an awesome debit card (no foreign transaction fees, ATM fee reimbursement worldwide, etc), earlier access to my money vs other accounts (e.g. I get paid on Friday, money is there on Thursday), and I've had no issues with it for the year or so I've used it this way. My t-bills live next to my savings "slush" in the same account, so it's quite nice. Here's my actual setup:

Fidelity Bloom Save - receives paycheck and transfers automatically bimonthly to "checking"; also has my t-bills
Fidelity Bloom Spend - main "checking" amount, has a debit card, which I never use and keep deactivated
Fidelity CMA - $0 balance; has my "real" debit card (the awesome one with no FTF), and I just make a transfer from Bloom Spend to this as needed
Ally Checking and Savings - old main account; connected to Target debit for that sweet 5% discount, and used for a couple of transfers I haven't bothered moving to Fidelity; I get 4% APY on my savings there, but I only keep about a few hundred there so it's not an interesting amount
Treasury Direct - rest of my efund in Ibonds; I'm considering moving this to t-bills at Fidelity, but I'm still deciding

[–] [email protected] 3 points 1 year ago

This is a great breakdown! Thanks for taking the time to share. You’ve given me a lot to think about and I’m glad this can work.