Short-Term Savings

CycloneRanger

I've very nearly met all my short-term saving goals--I've saved for a new (used) car, refractive surgery, and I've got 6 months' worth of minimum expenses saved.

My question is this--where should the 6 months' worth of expenses go? As far as this money is concerned, I am primarily concerned with liquidity and preservation of my principal (including against inflation). I can't seem to find a savings account that offers a decent interest rate, though--even CDs don't seem to offer much these days.

Is there something I've overlooked? I'd rather not have this sitting around in my checking account. I am not comfortable (from a risk perspective) putting it in a brokerage account.

neth

a few years ago I started doing the same thing, I found that capitalone had online money market accounts at 5% interest and went that route, over the last year it's dropped all the way down to 1.15% but it's better than nothing and has easy access via checks or direct account transfers online. There may be other places offering better rates if money market account is a way you want to go.

Thundyrkatz

Rates all around are very low right now, that's just the way it is these days. Check out Bankrate.com for national CD and MMDA rates. Rates are likely to remain low well into 2011.

Thanatos

Yeah, maintaining any reasonable liquidity is pretty much going to cost you all of your interest on that money these days. Sucks, but that's just how it is.

Deebaser

I have 1.3% at American Express savings and it's pretty solid. You can set it to transfer funds automatically every pay period and it usually takes only 2 business days to get cash into other accounts.

Although if you have that much cash on hand, you might want to look into opening an investment account and tossing some money there.

CycloneRanger

Well, I guess I'll take my 1.3% interest rate and smile, then. That looks to be about the current inflation rate anyway, so I'm not too disappointed.

Thanks for the advice, everyone.