A buddy of mine told me about Wealthfront recently and they’re 5% money market account rates.
Growing up in a world where savings accounts and even CDs never approached more than 2%, the rates on this new thing blew me away.
Free money is great, and I’d love to take advantage of these rates, but the only cash I have currently is the emergency fund I’m trying to build.
Anyone have thoughts on if putting an efund in this kind of service is a bad idea? Not sure if it’ll be liquid enough if a major expense comes up.
Sure, why not? Here’s how my emergency fund is set up:
With ibond rates going down, I’m laddering into t-bills, with the ultimate goal being some bonds maturing every 2 weeks.
I currently also use my brokerage account as my bank account, which is invested in SPAXX (4.91% 7-day average APY). It provides an awesome debit card (no foreign transaction fees, ATM fee reimbursement worldwide, etc), earlier access to my money vs other accounts (e.g. I get paid on Friday, money is there on Thursday), and I’ve had no issues with it for the year or so I’ve used it this way. My t-bills live next to my savings “slush” in the same account, so it’s quite nice. Here’s my actual setup:
This is a great breakdown! Thanks for taking the time to share. You’ve given me a lot to think about and I’m glad this can work.