WWYD with cash for exactly 12 months?

[Susie]

We're replacing all the windows in our house, and just got the install dates (Oct 10-12) for our project.  We have the cash in hand, but opted to finance the whole thing at 0% for one year, because why not.  It's a large ($46k) project, so there's some opportunity to earn interest in the intervening year.  

The one year counts from install date, so now we know we need the cash available roughly 1st week of October 2023.  The rate shoots up to around 16% after a year, so timely payment in full is a must, and therefore essentially no-risk is a must.

Right now the cash is earning around 2% in an online savings account.  Should I leave it there?  Look for a 12 month CD quickly?  WWYD?

ETA:  it looks like Capital One has one of the best 12 month CDs right now, at 3.25%.  Their performance savings is at 2.15%.

[mich1]

Since you have the cash, is there the opportunity for a discount if you pay in cash? I'd check this route out first.

[Susie]

Sept 29, 2022 13:15:00 GMT -5 mich1 said:

Since you have the cash, is there the opportunity for a discount if you pay in cash? I'd check this route out first.

We already financed the first half of the project cost, which was due when we finalized the order in June.  

[kadams767]

Could you save a portion of the $46k over the course of the next year? I’d probably try and hedge my bets a little while the market is down right now and invest as much of the $46k that I could re-save in the year’s time, and hold just the balance in the 2% HYSA.

[fernweh]

Maybe I’m misreading but I’m assuming you still have to make payments? Won’t you need the money to draw from monthly over the next 12 months? I’ve never had a 0% finance offer where I didn’t have to pay anything for 12 months.

If you will be making monthly payment over the next year I would leave in high yield savings.

[ohgillian]

Can I just say holy guacamole at the cost of replacing windows?? I mean I had heard it was expensive but had literally no idea it was anything like this.

[Susie]

Sept 30, 2022 21:11:13 GMT -5 fernweh said:

Maybe I’m misreading but I’m assuming you still have to make payments? Won’t you need the money to draw from monthly over the next 12 months? I’ve never had a 0% finance offer where I didn’t have to pay anything for 12 months.

If you will be making monthly payment over the next year I would leave in high yield savings.

We will need to make minimum payments, but they'll be small enough to cash flow, and essentially de minimis in the grand scheme of the total balance.  I forget how long they amortize the loan over as a default, but they don't aim for you to pay it off in a year.  They'd really customers to take longer, because the interest after a year is $$$$.