DIY Investors

UtahManAmI | Sep 11, 2021 | 2 posts since 2020

What do you all look for when choosing a bank or CU to park your cash? Besides rates and fees, should I be looking at anything else?

Thanks,

UMAI

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Answers

MNR | Sep 15, 2021 | 2 posts since 2021

Call the institution and see if , and how long it takes to get a human on the phone, Check out their financial health here at depositaccounts. Find out how much self services you can do online.

NYCDoug | Sep 12, 2021 | 193 posts since 2011

Minimum balances (to avoid fees; earn interest); online access; maximum number of linked ACH accounts allowed, with ability to originate both "Pushes" & "Pulls" via ACH. And limits on number of monthly withdrawals [ 3? 6? Unlimited?]

A free checking account is also useful. And -- if a credit union --being a member of the Co-op Shared branch system, for quick deposits & withdrawals (especially if you've got a Shared Branch near you).

Choice | Sep 12, 2021 | 450 posts since 2020

With rates as they are…return of investment rather than return on investment…the delta in rates is not worth much effort except ibonds, as previously mentioned. Ethics 101 also important

planxy | Sep 13, 2021 | 39 posts since 2013

(1) What kind of credit check is used on new depositors. Many credit unions, especially in California, subject applicants wishing to join without asking for credit to a hard pull which lowers credit ratings and stops other banks such as Chase from accepting those seeking good promotions. Stays on credit report for 2 years even if denied acceptance for unspecified reason. (2) What kinds of personal identification are required and in what format beyond drivers license and Chex Systems questions. One place wanted my passport.

Wolfburt | Sep 15, 2021 | 2 posts since 2020

If the amount you want to park is less than $10,000 single or $20,000 married, your best bet would be to buy Series I Savings Bonds. They are currently paying 3.54%, there's no state tax and you can cash them in with no penalty anytime after one year. No Bank or CU offers anything that is even close to I-bond rates or flexibility.

HollyHolly | Nov 9, 2021 | 56 posts since 2015

Also, ask if what they charge you to send you a check if they have low ACH limits. For example, US Alliance now charges $10 to mail you a check of your own money! Outrageous. In addition, if part of shared branch system, ask if you need to get special permission to withdraw more than a minimal amt. For example, at NASA, you need to call the day you want to take money out and get permission to take out that amount at a shared branch.

rateshunter | Oct 26, 2021 | 3 posts since 2021

"Add-on" able CDs..(with minimal contribution limits) Low EWP penalties, comparable values between MM and CD interest within institution. Most situations have individual goals..I am recovering/rebuilding in my retirement so whats important to me and my abilities might not match yours..I have the monthly/quarterly interest payment going directly into savings.. but I also plow those payments back into the CD Ladder in increments $12.50 as I am able to my "savings" account is minimal

mustsavemore | Nov 8, 2021 | 64 posts since 2013

I don’t see why you should put much money in banks given their paltry interest is below inflation. This forces you put it in stocks for greater returns.

Choice | Nov 8, 2021 | 450 posts since 2020

Point counterpoint…no. This forces you to make up the difference by adding principal to savings to compensate for lower rates! No need to increase risk…adding $ to principal amount (to compensate for low rates) has zero risk…going to market/stocks is 100% at risk!! Save more!

GreenDream | Nov 8, 2021 | 139 posts since 2019

Adding $ to principal simply increases the amount of money that is losing purchasing power to inflation at current banking rates.

GreenDream | Nov 8, 2021 | 139 posts since 2019

I mean that there are better places one can put ones money. ibonds, for example, beat anything that banks are currently offering, though there are limits on how much you can put into ibonds each year.

Choice | Nov 8, 2021 | 450 posts since 2020

$65k for a couple each year in ibonds…per Ken!

NYCDoug | Nov 8, 2021 | 193 posts since 2011

Stocks? Not now! They're setting record highs every other day, it seems . . .

Save up your ammo -- "keep your powder dry" -- while awaiting the next, inevitable, correction, bear market, or even recession. Line up some target indexes, and track them patiently, keeping a target asset allocation in mind, of course!

CuriousDave | Nov 9, 2021 | 60 posts since 2018

For most people, FIs are for putting in relatively small amounts of money they want to keep relatively safe, like emergency money or other short term needs. There are some variations, like T-Mobile Money Online Banking, where you can earn up to 4% on your balance, but the tiers for the higer rates are small. There are also people in or nearing retirement who believe in keeping a high portion of their portfolios in fixed income investments to provide stablity in case the stock market tanks and, because of their age, they will not have enough time to recover their losses. It's mostly a question of one's personal risk tolerance. Those with a very high appetite for risk usually shun banks and credit unions altogether and invest not only in the volatile stock market but in even more volatile things such as cryptocurrencies that will reward them faster - and bigger - if prices rise, mindful that losses may be huge when prices tank. Long term Investors in FI products like CDs who commit large amounts have to accept that over time they will be eaten alive in periods of high inflation even though their principal is nominally safe (assuming they are insured by the FDIC or NCUA). Series I Savings Bonds do offer inflation protection but the real return is zero, because the current fixed rate component is zero. There is a very low maximum annual investment amount of $15,000 per person, but it may be posssble for some people to get creative using multiple account holdings like trusts. Commercial bonds offer higher yields but carry several risks, the main one right now being rising interest rates in the not too distant future that will result in capital loss. High dividend earning stocks carry the same market risks as other stocks, so some of those seemingly high yields can be wiped away by capital losses. Pick your poison.

Choice | Nov 9, 2021 | 450 posts since 2020

I see a lot of foreigners paying cash for high-end homes to park funds and keep a non-occupied house…obviously to get cash out of a country…convertibility may be in the cards for some of them. And other potential homeowners are not able to buy and drives up the prices. Thus, a question then…why should/would (usually senior) take all cash to sell a debt free home?

HollyHolly | Nov 9, 2021 | 56 posts since 2015

I would also look at whether you can do ACH to move money in and out and what the daily and monthly upper limits of ACH are for the institution. For CUs I would look for one that is part of Coop Shared Branching.

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