High Yield Savings Account vs. Money Market Mutual Fund
ฝัง
- เผยแพร่เมื่อ 7 มิ.ย. 2024
- In this video, we're going to compare high yield savings account vs. money market mutual fund. We'll discuss the pros and cons of each option, and help you decide which is right for you!
If you're looking for a high yield savings account that offers a stable rate of return, then a money market mutual fund could be a good option for you. Money market mutual funds are safe and offer a high rate of return, making them a great option for short-term savings. Alternatively, if you're looking for something with a bit more flexibility, a high yield savings account could be a better option for you. High yield savings accounts offer a higher rate of return than money market mutual funds, but they can also be
🛑 SUBSCRIBE! : shorturl.at/fL014
🟦 About my channel:
Rob CPA channel was created with a mission to provide viewers with accurate content so they can be proactive in their tax planning strategies and build financial wealth. The video topics I selected reflect real-world issues that I’ve seen our clients experience relating to their personal tax returns, retirement plans, and accounting.
The channel allows me to share my passion for taxes, personal finance, and accounting. I create content I wish schools and entrepreneurship programs/accelerators would teach their students and companies. I take complex topics and simplify them for the viewers as well as show examples.
I will be covering the following topics:
- Personal & business tax planning tips;
- Personal finance;
- Accounting;
- Investing;
- Entrepreneurship
New videos are released every week, so be certain to SUBSCRIBE! : shorturl.at/fL014
I just moved a considerable amount of cash (at least I consider it considerable) from a standard savings account I was earning only 0.1% APY from into a Money Market Prime account with a 4.75% APY. I'm gonna go from earning approximately $35 a year to earning about $2,400 a year...it's a no brainer! My only gripe is, I'm angry at myself for not doing this a few years back...missed out on a decent chunk of change. Thanks for the video...
Same boat, been banking with my regional bank(5/3) since I was born, got upto 60K in saving making not 1, not .1 but .01% int. Just sticking it in my schwab sweep account is making .5% interest. If only I did this sooner. :/
You made way more sense to me than all the other people on TH-cam using dumb unnecessary editing and graphics. Thanks!
Thank you very much.
I'm disabled and eager to work, but doctors won't allow it. I inherited $200,000, held by my sister in a bank. It's not earning interest, which seems unfair. I want to explore options for it- (Hysa or stock market investing).
A healthy portfolio needs three essentials: ETFs for diversification, cash-flow assets like dividend stocks, and leading tech stocks such as. consult a reliable advisor is crucial for proper investment planning.
Consider allocating 30-40% to a High-Yield Savings Account (HYSA) and enlisting the help of an advisor to diversify into positions with the rest of your capital. My advisor has significantly impacted my financial journey, fostering clarity and confidence in her strategies. I've made over 80% capital growth minus dividends.
I've been looking to get one, but have been kind of relaxed about it. Could you recommend your advis0r? I'll be happy to use some help.
I'm cautious about giving specific recommendations as everyone's situation varies. Consider independent financial advisors like "KRISTIN AMBER LANDIS" I've worked with her for years and highly recommend her. Check if she meets your criteria.
I looked up her name online and found her page. I emailed and made an appointment to talk with her. Thanks for the tip.
Thank you. This was very helpful.
Glad it was helpful!
Thank You for the information. It was exactly what I was looking for.
Glad it was helpful!
Capital one does not have a balance you have to keep in a high yield that pays 4.3 percent. Not penalty for withdrawals.
There’s SIPC insurance for investment products
Good video and thanks for the information. Needed to watch it in 2x the speed 🤣
Glad it was helpful!
I have been angsting over how to move my savings account from low interest rate bank for over a year now. Is Zelle safe? Cash app? Or do I need to wire transfer, which is pretty expensive way to go IMO.
Thank you so much for this information, and you're 👉 right, most people are scared to open a new bank account. I'm a former bank teller, I've seen it all.
You're so welcome!
I always got confused with MM accts. There are many types too. So what's the difference between MM mutual funds vs MM IRA acct?
Great content
So I am new to this. So for example an SPAXX, are you reported and taxed on dividends if you select to have them reinvested? I currently have a high yield savings paying 4% but wanting to move over to fidelity to either cd’s , money market or mutual funds to earn a better return. I am also in the middle of transferring my Wells Fargo ira in which I am paying them $300 plus per month to do nothing over to fidelity and maybe putting that in mutual funds. So many options for someone raw
You will pay taxes regardless of what you choose to do with the dividends.
Thank you so much for this video! Is it better to open a high yield savings account or keep it uninvested in a brokerage account like Vanguard or Fidelity that also gives around 5% annual?
My only thought is whether that brokerage account is FDIC insured
Good question.
Agree with the response on the FDIC insured.
If the rates are similar, keeping it in a brokerage account is fine, but you want to have a good balance of cash and investments - not too much in cash as you could earn a better return elsewhere.
CIT bank requires a balance of $5000 or more to qualify for that nice 5.05 percent APY but if you go below it goes to .25%
Thank you for the clarrification.
Where should LLC’s open bank accounts? Ally Bank doesn’t allow LLC’s. BofA requires $6,000 minimum daily balance. With 5 properties, they’re pretty much getting $30,000 of our money without paying us any interest. Recommendations for LLC’s?
Check out Mercury Bank: mercury.com/ or Brex - they have higher interest rates for small businesses.
You can also check out Oak Street Bank.
Personally, I like Chase because of its ease of use, but you can always have two different banks for your business.
Thanks so much
You're welcome!
I'd still leave it in there even after they go back down because chances are they will still beat the 0.01% youd get at your regular bank.
Thank you for your response.
I put 16 grand in a mutual fund at Fidelity 8 years ago and today its around 21 grand. I just learned about HYSA. Should I leave that cash where it is or move it to a HSYA?
What is a % of taxes you paid each year for these account?
have any recomedations for money market account?
Here is a side by side comparison:
www.forbes.com/advisor/l/high-yield-savings-accounts/?gad_source=1&gclid=CjwKCAiA_OetBhAtEiwAPTeQZylQ-kgGSju48VMBnINkvVqOETUavnbZ2iHWWM8CG0jciF3qe0qGyBoCO4oQAvD_BwE&gclsrc=aw.ds
So my high yield savings account has 5% interest rate so monthly interest would be .41% every month, yes…
so with the money market mutual, which seven day run is 4.7% , is that 4.7% monthly, or is that over the year?
over the year
Why not go with the CIT High Yield? It's 5.05% and FDIC insured. The best from the money market mutual fund is 5.24 and is not FDIC insured. Why risk 100% to gain the additional .19%? Anyway, great content and video Rob!
Thank you for the response. CIT does have a nice rate. The banks are constantly increasing their interest savings rates, which is nice, but tough to keep up with videos.
You da man, keep up the great content buddy!@@rob_cpa
The risk of a treasury money market is the same as FDIC. You are relying on the US government to pay its obligations. If the government cannot cover treasury bill obligations it most certainly is not covering your FDIC insurance claim either.
One is FDIC insured, the other is not. Once a bank is FDIC insured it is a backing for your money. This makes it much safer up to 250,000.00. While money market funds aren't FDIC-insured, investments held in brokerage accounts (including money market funds) may be insured by SIPC. Unlike FDIC coverage, SIPC coverage doesn't insure the value of your investment-it protects you in the event your broker fails.
@@michaeldavis3188 Both covers your claim in the event your loss is due to institution fail. Neither covers due to market fluctuations. FDIC will not reimburse you for loss of purchasing power of cash due to inflation. SIPC will not simply cover your loss due to decline of security share price.
Do you have to pay tax on a HYSA like you have to on a MMMF
Federal, yes, but MMA may have tax benefits depending on the percentage of government bonds the account holds and the state you live in.
I think it depends on where your money is. If I've got uninvested cash in a brokerage account, I'm not moving it to A HYSA, I'm investing in a MM Fund.
Conversely, the rest of my money is at Wealthfront cash. Wealthfront, whoot whoot, once And done.
What about factoring expense ratio of money market. If its like .5 do you deduct it from 5 percent you're making?
It is net. Performance or NAV is net of fees.
a money market mutual fund account has an exp ratio which will eat into the returns
Depending on where you look, the yield already factors in exp ratio. That’s how fidelity does it
You didn’t address taxation of interest/dividends. Money market mutual fund by fidelity ,SPAAX, calls its interest a dividend, but it is not qualified dividend… very misleading
You forgot to mention taxes on these accounts they all different
Money accounts
I just opened up a money market account with ticker SWVXX, when does it pay dividends? Is it quarterly? Thanks in advance.
They typically payout dividends each month, but you should double check with Schwab.
@@rob_cpa thanks, and I just saw that I got $108 added to my SWVXX account. This was probably the 5.24% interest on $25,255 that I invested.
From my research, it pays out at the 15th of each month (or the next business day if that day falls on a non-business day)except in December which would be the last business day of the month.