Where To Put The Money

[ny96]

We are at the start of a major remodeling project and have applied for a Heloc to pay for most of it which is in process. Once we receive this money we still have to file permit requests and hire contractors so it will probably be at least 3-4 months before we touch it and then hopefully we’ll draw It down over the next year and a half. Where can we put it in the meantime so we get a little bit of interest, but don’t pay penalties to withdraw?

Pdq numbers as I will probably delete these details shortly. We will be getting xxx and have been told that it will be in the form of a check with no restrictions on what we do with it.

[archiethedragon]

Ally bank online savings account

[ny96]

I see that with Ally or another high yield savings account I’d be earning around .5%. Is this going to be my best bet? Also, how do I make sure that I stay under the FDIC limits. Can I simply open 2 savings accounts at the same bank? This seems like it wouldn’t work.

[ny96]

Dec 1, 2021 17:47:09 GMT -5 mofongo said:

We did a HELOC, and didn’t get a check. We had X amount we could spend from the account, and paid back what we used over the next year. I guess they aren’t all the same?

Last time I spoke with our mortgage guy he said it would be a check. The account makes more sense.

[just]

FDIC Insurance limits are up-to $250,000 per depositor per bank per ownership category so if you're putting it in a joint account you're insured for up to $500,000. If it's more than that, and you're worried, you'd need to open another account with a second bank.

You can have more than the limit in an account, it's just that the excess wouldn't be insured if the bank collapsed. It seems pretty unlikely that a major bank will completely collapse in the next 18 months without the world going to hell in a handbasket - but I get that you don't want to have to worry about that.

ETA: Also for 18 months, if it turns out it's not as mofongo said, I wouldn't put it anywhere else other than a HYSA which will generally top out at .5% right now.

EATA: It seems like a joint account for A and B (500k) + Individual A account (250k) + Individual B account (250k) are all insured separately so you can have 1 million per bank. Per this ... www.ally.com/bank/fdic/ 

[ny96]

mofongo That makes sense. Our mortgage guy is calling it a HELOC, but I’m not sure it technically is, as we are rolling it into our mortgage.

[simpsongal]

Dec 1, 2021 18:16:09 GMT -5 ny96 said:

Dec 1, 2021 17:47:09 GMT -5 mofongo said:

We did a HELOC, and didn’t get a check. We had X amount we could spend from the account, and paid back what we used over the next year. I guess they aren’t all the same?

Last time I spoke with our mortgage guy he said it would be a check. The account makes more sense.

im guessing it’s a home equity loan, not a line of credit - hence the check. Savings account sounds like a good call. Start ordering materials if you can - supply chain issues are real! Good luck!

[sadlebred]

Like others said, a HYSA is your best bet. I wouldn't put it anywhere that it can lose value (ie stock market, etc.).

[goldengirlz]

High interest savings account is also my answer.

But I want to know what you’re doing! We’re looking at buying a new house and most likely it’ll be a total gut job. I want to know what that amount gets in our state!

[gt7301b]

You could put $10,000 a person in iBonds, they are getting a 7% return right now. There is a one year holding period, so you could use those funds last and still meet the holding requirements.

[puppylove64]

Savings accounts only allow 6 transactions per month fyi