Where to safely park cash , with minimal risk and get at least some return enough to offset inflación.Hi:
I’d like to have advise from investors more experienced and smarter than me.
The question is where to safely park cash , with minimal risk and get at least some return enough to offset inflation.
We have a little cash that we like to get some return with minimal risk.
I’d appreciate any good advise.
Thanks,
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Prepare to be bored:
If you’re in the US and are talking about a relatively small amount that you can tie up for a few months, I like US savings bonds — specifically the I-Bonds which offer inflation protection for small savers (maximum is $10,000 per year per person). They reset for inflation every six months and will keep up with the CPI, plus a little bit, and therefore yield a lot more than any standard savings account or money market account right now, and more than most CDs that have less than a 5-year tie-up.
Current yield for bonds purchased before October is 2.52%, it will be reset again in November for the next 6-month period. The current fixed rate is 0.3% annually — that means they will pay 0.3% over the inflation rate, which is currently about 2.2%, the fixed rate stays in place for as long as you own the bond, but the inflation adjustment changes every six months. Sometimes the fixed rate offered is 0, but it’s been above zero for a while now.
So that’s my first choice for savings in a low-return world, though if you need more access to your money or need to allocate more than $10,000 you can also come close to keeping up with inflation with an online bank account — online money market accounts can get you 2% from a lot of different banks right now, far higher than the typical savings account from a local bank is likely to be.
Browse Bankrate.com to see what’s on offer — to beat inflation at the current 2.9% CPI rate without risk of loss, you’ll have to tie up your money in a CD for about five years — I consider I-bonds to be a good alternative to CDs, since I-bonds can be bought in small increments and your investment is only tied up for 3 months (if you set up a rolling savings amount of, say, $100 a month or something, then you can’t redeem the bonds you’ve bought in the most recent three months — but anything older than that you can sell anytime).
Current I-bond info is at https://treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm
Thanks for the smart and solid advise.
Hi,
This isn’t so much an investment, but there are Savings accounts / Money Market account available which are now offering 1.75% or even above 2%…. (Quite a few can be opened online). Check out bankrate.com :
https://www.bankrate.com/banking/savings/rates/
Thanks.
I appreciate your advise.