| Treasury Bills If you need access to your funds before one year, you can buy Treasury bills, also known as T-bills. You can buy them through your broker or through TreasuryDirect. The average long-term yield for a four-week T-bill is 1.17%. That said, it's been above 3% since October 2022. Savings Accounts If you need even more liquidity, one of the highest-yielding savings account in the U.S. currently belongs to Bread Financial, whose Bread Savings high-yield savings account yields 1.65% and can be opened with as little as $100. Tax-Free Money Market Funds If you're in a very high tax bracket, you may want to consider a money market fund that invests in tax-free municipal bonds. For example, the Vanguard Municipal Money Market Fund (VMSXX) yields between 1% and 2% annualized, tax-free. The price remains stable at $1, and Vanguard has extremely low fees. Certificates of Deposit (CDs) Forget about CDs for now. You'll make more on a Treasury. If your money is going to be locked up for a period of time (even a brief period), Treasurys are the way to go (unless it's for a year, then buy Series I savings bonds). If your investing time horizon is longer, I strongly recommend investing in Perpetual Dividend Raisers - companies that raise their dividends every year. There are plenty of stocks that yield 4% or more today, but importantly, you'll earn more every year when these stocks raise their dividends. (Click here to access my Ultimate Dividend Package... FOR FREE!) But for short-term money, until the Fed meaningfully raises rates, savings rates will remain under pressure and it will be a challenge to keep up with inflation, except for with Series I savings bonds. Good investing, Marc |
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