Short-term savings
April 2, 2012 8:51 AM Subscribe
Best place for short-term savings?
I'm saving up for a big trip in the summer of 2013. Hoping to sock away between 10 and 15k. Right now I'm putting savings into a rewards checking account getting 2.26%. Is this the best place for it? I'm pretty set on going on this trip, so my risk tolerance is fairly low.
I'm saving up for a big trip in the summer of 2013. Hoping to sock away between 10 and 15k. Right now I'm putting savings into a rewards checking account getting 2.26%. Is this the best place for it? I'm pretty set on going on this trip, so my risk tolerance is fairly low.
Response by poster: Provident CU (Bay Area specific): http://www.providentcu.org/index.asp?i=news&url=WhatsHotFrames%2FNewsFrames%2FLongTerm%2FSuperReward%2Easp
posted by kelseyq at 8:56 AM on April 2, 2012 [1 favorite]
posted by kelseyq at 8:56 AM on April 2, 2012 [1 favorite]
Best answer: Yes with today's interest rates a rewards checking account is going to be your best option for no risk savings returns. The rate you are getting is pretty good as far as rewards checking accounts go, 4% is around the max you will get anywhere and your 2.26% is more than double what you'll get with most high interest savings accounts or 12 month CDs. Make sure that your 15k is less than the limit for your rewards checking though, there's always a maximum amount that gets the good rate for that kind of account. There are other investments that could give you a better return, but they will have more risk/variance than you'll want for short term savings.
posted by burnmp3s at 9:01 AM on April 2, 2012
posted by burnmp3s at 9:01 AM on April 2, 2012
Best answer: I LOVE Provident, and recommend them as often as I can. I've also done quite a bit of research and yes, Provident is definitely the best out there. Occasionally I will see other rewards checking accounts with slightly higher rates, but never at a place accepting out of state customers (the last one I found was at a credit union in Ohio, I think). And right now, rewards checking accounts with credit unions are consistently giving the highest interest rates of any type of account. I don't even see longer term CDs with rates better these days.
And yeah, I research this stuff on my spare time for fun. Heh.
posted by JuliaIglesias at 9:12 AM on April 2, 2012
And yeah, I research this stuff on my spare time for fun. Heh.
posted by JuliaIglesias at 9:12 AM on April 2, 2012
Best answer: I've also done quite a bit of research and yes, Provident is definitely the best out there. Occasionally I will see other rewards checking accounts with slightly higher rates, but never at a place accepting out of state customers (the last one I found was at a credit union in Ohio, I think)
If you haven't seen it already, DepositAccounts is a great resource for this kind of thing. You're right that most of the 2%+ rewards checking accounts right now are either at credit unions that only allow local members or have some other kind of limiting criteria rather than being open to everyone nationally.
posted by burnmp3s at 9:37 AM on April 2, 2012 [2 favorites]
If you haven't seen it already, DepositAccounts is a great resource for this kind of thing. You're right that most of the 2%+ rewards checking accounts right now are either at credit unions that only allow local members or have some other kind of limiting criteria rather than being open to everyone nationally.
posted by burnmp3s at 9:37 AM on April 2, 2012 [2 favorites]
I concur with burnmp3s and JuliaIglesias. That's about the best you can hope for these days when it comes to a liquid account. And DepositAccounts is a great reference for this kind of info.
Another possibility you might want to investigate is add-on CDs. They usually earn higher rates than regular CDs. (I have one that is earning 3.5% APY.) The catch is that the balance starts at zero, and then you make additional deposits to it at regular intervals up to the maturity date. The maximum amount you can deposit per month is usually capped at something like $500. So although the rate is higher, the resulting dollar amount you earn in interest is not spectacular. But it's better than nothing. Like a regular CD, you cannot make any withdrawals prior to maturity without incurring a penalty. Since your trip is still over a year away, this might be a good solution for you.
Other than that, with the Fed promising to keep interest rates low until at least late 2014, I don't think there's much hope for finding better rates for short-term savings without increasing your risk tolerance (which you've said you're not willing to do).
posted by Nothlit at 10:07 AM on April 2, 2012
Another possibility you might want to investigate is add-on CDs. They usually earn higher rates than regular CDs. (I have one that is earning 3.5% APY.) The catch is that the balance starts at zero, and then you make additional deposits to it at regular intervals up to the maturity date. The maximum amount you can deposit per month is usually capped at something like $500. So although the rate is higher, the resulting dollar amount you earn in interest is not spectacular. But it's better than nothing. Like a regular CD, you cannot make any withdrawals prior to maturity without incurring a penalty. Since your trip is still over a year away, this might be a good solution for you.
Other than that, with the Fed promising to keep interest rates low until at least late 2014, I don't think there's much hope for finding better rates for short-term savings without increasing your risk tolerance (which you've said you're not willing to do).
posted by Nothlit at 10:07 AM on April 2, 2012
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posted by gadha at 8:53 AM on April 2, 2012 [1 favorite]