Ideas on where to short-term park $500k cash?

casperof1999 · Post by **casperof1999** » Wed Sep 15, 2010 9:27 am

recommendation: any good short term bond fund if you don't have any forex considerations. e.g. DODIX. Check morning start for others.

Sid · Post by **Sid** » Wed Sep 15, 2010 11:14 am

mothakapalli;329722Hi all, I thought it wouldn't hurt to ask to see if anyone could suggest ideas I hadn't considered.

I'm waiting for a property deal to come through that will likely take 2-3 months. While I wait, does anyone have suggestions on where I could park about $500k cash?

Thanks.

Can you take any risk with your principal (since this is supposedly for a very short term investment)? If not, then why not just park in a bank account.

moneyIsNot_funny · Post by **moneyIsNot_funny** » Thu Sep 16, 2010 8:05 pm

OP,

You are one of the very few folks who got a well earned and sustained appreciation from Bobus for your money sense and your predilection for diligent research. I still recollect with awe your sustained and dissected research on the Self Directed IRA. You asking us for these kind of tips is too comical. Please do not humor us this way. Dont forget to tell us what are some of the best options to park 500K so that one of us can do it in the future, and for smaller cash outlays. Thanks.

soomdy · Post by **soomdy** » Fri Sep 17, 2010 6:26 am

Presidential bank offers about 1.25 % on savings. upto 35000 $s. Above 35k , i believe it is 1 %/annum.
If you have kids, opening savings on kids name will earn tax free interest for the first 850 $s. For the next 850 $s earned interest i believe it is 1 %.
Their checking also offers 1 %/annum interest.
Never keep more than 250 k under 1 social security number, as FDIC insures only upto 250 k per account , i believe......

mothakapalli;329722Hi all, I thought it wouldn't hurt to ask to see if anyone could suggest ideas I hadn't considered.

I'm waiting for a property deal to come through that will likely take 2-3 months. While I wait, does anyone have suggestions on where I could park about $500k cash?

Thanks.

direstraits88 · Post by **direstraits88** » Fri Sep 17, 2010 8:52 am

Well.. i would've recommended my "personal" financial consultant who used to guarantee 10% return. But unfortunately, he's in now in a penetentiary for having "madoff" other's money.

So, you got to stick to the measly 1.5% return that the bank is giving these days.

GMB · Post by **GMB** » Fri Sep 17, 2010 6:55 pm

"If you have kids, opening savings on kids name will earn tax free interest for the first 850 $s. For the next 850 $s earned interest i believe it is 10 %."

Soomdy : Is there any age bar for kids to open Bank account ? Any idea what's the minimum and max age ?

soomdy · Post by **soomdy** » Fri Sep 17, 2010 7:49 pm

i made correction of 1 % from 10 % in earler post.

kid minm age i believe is 0 , asong as he/she has his ssn.
Max , am not sure, call the bank.....must be about 18 yrs.

Desi · Post by **Desi** » Fri Sep 17, 2010 8:36 pm

Re posts 3 5, 7, 8.

1. The first $950 of interest or dividends earned by a minor are tax free.
2. The next $950 of interest or dividends earned by a minor are taxed at a tax rate of 10%.
3. Additional amounts of interest and dividends earned above $1900 ($950 + $950) get taxed at parents rate when the minor qualifies to file his income tagged on to parents.

The OP needs this money in 2 to 3 months. If he deposits it in his child's name, is he giving a gift or loan? If it is a gift, he cannot take it back. If a loan, IRS has clauses on taxes on notional income on loans.

So, in my view, depositing the money in child's name is not a good idea if it is not an outright unconditional gift and not taken back.

gwldaddu · Post by **gwldaddu** » Fri Sep 17, 2010 9:16 pm

I did a quick search on bankrate.com and found that 0.90% was the maximum for a 3 month CD.

Then I went to my Credit Union's website to check their rates. It is 1.00%

So, you are looking at safe and sound return of aprox (0.01 * 500,000) divide by 4 == $1250 minus taxes

$1250 not a big money when you compare your cash of $500,000.

So, I would just park it in any bank 3 month CD.. I might get 0.8% or I might get 1.0%.. Not a big difference.. I would rather focus on other important things in my life in the meantime.

2 cents..

GMB · Post by **GMB** » Sat Sep 18, 2010 12:45 am

Desi..thanks

. "Additional amounts of interest and dividends earned above $1900 ($950 + $950) get taxed at parents rate when the minor qualifies to file his income tagged on to parents."

So does these means : If kid is 4 years old and if we open the a/c and once he accrual $1900...he need to start filing tax ?