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ideas to invest 50k short term ( ~ 2 months)

By permanent_marker   Follow   Mon, 4 Jun 2012, 10:01pm   1,342 views   8 comments
In Mountain View CA 94041   Watch (0)   Share   Quote   Permalink   Like   Dislike  

Where would you 'park' 50k for 2 months?
It is sitting in a money market account earning zero. I am wondering is there a low-risk parking place with a modest return?
or should I just leave it as it is?

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1. Patrick Follow Befriend (54) 5,188 threads 6,157 comments 46 male Menlo Park, CA

   1   10:19pm Mon 4 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   Pay off debt. The interest savings are tax free! But if you have that much savings lying around, you probably don't have significant debt. Money market funds are NOT safe: http://finance.yahoo.com/news/could-money-market-funds-break-070132073.html They can lose value, and did. CDs are safer. Another option is to try to pay your rent several months in advance for a discount. If you can get even a 1% discount for paying 3 months up front, that's actually a great return annually. Though you give up the flexibility of withholding rent if the landlord won't repair something.

2. Dsdf4 Follow Befriend 1 threads 19 comments San Mateo, CA

   2   10:30pm Mon 4 Jun 2012   Share   Quote   Permalink   Like   Dislike   I'm confused - the article says "For their part, the money market accounts, or MMAs, offered by banks are deposit-based and don't run the same risk. The accounts also are insured by the Federal Deposit Insurance Corp., up to $250,000." I have my money in MMA's, because of my understanding (confirmed by FDIC's website) that these are FDIC insured...am I missing something? From the FDIC website: "You are probably familiar with the traditional types of bank accounts - checking, savings, and certificates of deposit (CDs) - that are insured by the FDIC. Banks also may offer what is called a money market deposit account, which earns interest at a rate set by the bank and usually limits the customer to a certain number of transactions within a stated time period. All of these types of accounts generally are insured by the FDIC up to the legal limit of $250,000 and sometimes even more for special kinds of accounts or ownership categories. For more information on deposit insurance see FDIC brochure "Your Insured Deposits.""

3. Waitingtobuy Follow Befriend 8 threads 190 comments

   3   10:34pm Mon 4 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   A modest return for two months? Even if you found a checking account paying 6% that was government insured (and you won't), then that 2 months would yield $250 pre tax. After taxes, more likely $200. Why worry...just put it in any checking account and withdraw in two months. Or leave it where it is.

4. clambo Follow Befriend (5) 1,070 comments Santa Cruz, CA

   4   10:44pm Mon 4 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   If you need the dough in 2 months there is almost nothing better than a money market account. I have used Vanguard Total Bond Market Index as my parking place for money.

5. drew_eckhardt Follow Befriend (1) 2 threads 324 comments Sunnyvale, CA

   5   11:26pm Mon 4 Jun 2012   Share   Quote   Permalink   Like   Dislike   permanent_marker says It is sitting in a money market account earning zero. I am wondering is there a low-risk parking place with a modest return? Sure. You can put it in bank/credit union high yield checking accounts which have some strings attached but pay less unreasonable (still negative in real terms after you subtract income tax) interest rates. Bank accounts are FDIC insured; Credit union accounts are covered under NCUSIF. At least some allow married couples to each have accounts on which the other spouse can be a joint owner. For instance, my wife and I have a pair of checking accounts which pay about 2.3% on the first $25,000 provided that you have a monthly direct deposit of your paycheck or ACH transfer from another bank (we use that option) and make 10 check card transactions a month. That's $95 over 2 months which is over triple an on-line money market account paying 0.7% which would only return $29 before taxes. or should I just leave it as it is? It depends what your time and the principle of letting banks profit less from your money are worth to you. I'd do it for the principle of it.

6. drew_eckhardt Follow Befriend (1) 2 threads 324 comments Sunnyvale, CA

   6   11:43pm Mon 4 Jun 2012   Share   Quote   Permalink   Like   Dislike   Waitingtobuy says A modest return for two months? Even if you found a checking account paying 6% that was government insured (and you won't), then that 2 months would yield $250 pre tax. After taxes, more likely $200. If such a thing existed, setting up the account on-line and faxing to verify ID would pay over $1000 per hour pre-tax and be entirely worthwhile.

7. FortWayne Follow Befriend (13) 102 threads 3,764 comments

   7   11:53pm Mon 4 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   Depends on how much risk you are willing to take. Nothing out there will make you any money in 2 month when it comes to standard investment vehicles.

8. wizkid Follow Befriend 1 comments

   8   9:54am Tue 5 Jun 2012   Share   Quote   Permalink   Like   Dislike (1)   Park it in inflation protected treasury bonds. You them by via a mutual fund companies. For example, there is the Fidelity Inflation-Protected Bond Fund (FINPX). Here are the average yearly performance figures for it: YTD Performance as of 06/01/2012 5.00% 1 Year* 12.83% 3 Year* 9.60% 5 Year* 7.54% Life* 6.58% You can also buy them via Exchange Traded funds that can be purchased like stocks. For example, the iShares Lehman TIPS Bond Fund. Nothing is risk free but they are about as low risk as you can get. Of course, two months is such a short time. You may want to forgo any return and just play it safe but keeping it in the money market account particularly if funds are committed to something in two months and you cannot afford to lose any of it.