What do I do with a $100,000 check?

April 9, 2016 2:24 PM

I just closed on a cash-out refinance to pay for a home renovation. I have a $100,000 check--what do I do with it?

I plan to deposit the check at my credit union Monday morning. I'll get a second checking account, I guess, to keep track of expenses. But renovations don't start until September--do I just let it sit there until then? Anything else I should be worried about?

posted by anonymous to Work & Money (6 answers total)

Depending on the balances in your other accounts, you should consider whether you'll run up against your FDIC insurance limits.
posted by Jahaza at 2:28 PM on April 9, 2016 [3 favorites]

You could get a CD for three or six months, which will probably have a better interest rate than your checking account.
posted by The corpse in the library at 2:42 PM on April 9, 2016

Short term CD interest rates are actually below high yield savings account rates right now. Look for an online savings account that will give you around 1% unless your credit union is competitive with that.
posted by Candleman at 3:01 PM on April 9, 2016 [7 favorites]

Slowly buy Home Depot gift cards on Raise? Right now you can get about 4%. Nothing great, but better than a savings account.
posted by JoeZydeco at 10:25 PM on April 9, 2016 [2 favorites]

Yes, just let it sit. Renovations starting in September is too close a timeline to be doing anything fancy, since even if you get some kind of super high rate we're only talking a few hundred bucks in extra interest. Not worth the hassle.
posted by zrail at 9:10 AM on April 10, 2016 [2 favorites]

Deposit it into a new checking account so that you can trace the money and properly allocate it. The interest you are paying on the amount that you cashed out is now investment interest expense. You can't take a loss by applying it against investment income but you can role over the unused part of it to next year and it will reduce the amount you pay in taxes on any non deferred investment income. In terms of just having it sit there you could put it in CDs or see if your credit union has a teaser rate for new accounts over a certain amount. Somebody else brought up FDIC Insurance, but the insurance limit is 250,000 but if you have 150,001 just sitting in a checking account already well, screw you! There are a couple credit unions here in Portland that have big billboards advertising mildly suspicious rates that make me wonder about their balance sheets but Hey! its insured moral hazard be damned. Oh I forgot, you are probably just going to take the home mortgage interest deduction so never mind.
posted by Pembquist at 10:35 PM on April 11, 2016