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what is the best vehicle for short-term cash
- Thread starter highstake
- Start date
Quote from highstake:
thanks man !
My account on TDAmeritrade only offers about 1% (or less). I'll definately ask them about it.
I forgot to mention that their money market option might be restricted by account size, which is why it's not advertised. I went to a local branch where they set it up for me and the guy mentioned that they recently raised the account minimums for money market qualification from $80k to $100k. I'd call to confirm either way, that's a sleazy policy if you ask me.
I'll be moving the my funds over to IB soon. FedFunds - 25/50bp makes a lot more sense.
Check out http://bankrate.com/ to search for the best rates.
Quote from galiano:
RE: ETFs
1) you pay commission in and out
2) to capture the dividend you must be owner of record on ExDiv date which is monthly for fixed income.
FWIW, I agree with both points of view. Depending on purpose, hold time, and amount, ETFs may be a valid alternative to increase yield. For my needs, vanilla money market with constant value works. Without need of concern for the fixed income market et al.
The question here was what to do about brokers who don't offer money market sweeps. When they're paying 1.5% annually, and you know you're going to sideline (like if you do the sell in May and go away thing), you will easily make it thru at least 1 dividend period, while you're money is making absolutely nothing sitting at a small cheap brokers.
If your entire account is a few thousand dollars, it may not matter, but for more than that it defiinitely matters. As for commissions, yes, you pay a commission. The entire point of the question is that you're in a VERY CHEAP commission broker that doesn't offer a decent money market fund.
If it weren't VERY CHEAP commissions, what would be the point of using them in the first place when they don't offer decent rates on their sweeps? What else could they possibly offer to keep your account there besides their money market yields, their commissions or their software? We're talking about compensating for one of the missing components because the one you're there for more than justifies you having that account with them.