I have $190,000 in some kind of Merrill Lynch preferred deposit account that at one point was making a little over 5%. They have significantly reduced the rate lately and I wanted to see if there were any better options out there. I don't want have to keep moving it around every few months to keep up with the best rates but maybe that's what you have to do???

I use VUSXX for company excess.

Most brokerage accounts have a range of money market alternatives, most of which offer 4% +/- 0.20% currently. My schwab rate is 4.14% now. If you're not in one of those, have your advisor (or you, if self-directed) get you in one, or threaten to move the money elsewhere.

I found this recent Merrill document re: Money Market Rates:

https://olui2.fs.ml.com/publish/content/application/pdf/gwmol/iccratesheet.pdf

Our advisor likes PULS PGIM Ultra Short Bond. Dividend rate of 4.9% + capital appreciation puts it around 6%

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I use TMCXX but I got in when the initial minimum investment was $100,000. I think that moved to $3MM now.

I'm meeting with BOA financial advisor next week on this exact issue

will report back.

Worlds Foremost Ag said:

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Our advisor likes PULS PGIM Ultra Short Bond. Dividend rate of 4.9% + capital appreciation puts it around 6%

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Thanks! PULS piques my interest since Morningstar also rates it 5 stars for risk-adjusted return. I was originally looking at SGOV (iShares 0-3 Month Treasury Bond ETF), which should be lower risk but is 3 stars.

Worlds Foremost Ag said:

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Our advisor likes PULS PGIM Ultra Short Bond. Dividend rate of 4.9% + capital appreciation puts it around 6%

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I'm seeing an SEC Yield of 4.53% + a past year capital appreciation of 0.20%. Not really very close to 6%.

It seems like a solid part of a conservative portfolio, but let's not over-sell it.

Aggie09Derek said:

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Merrill has me in TFDXX for cash

https://www.blackrock.com/cash/en-us/products/282628/blf-fedfund

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Very good recommendation for the initial post. Good one to offer up as "give me this or something better".

My annualized return is 5.70%. YMMV

I've been using CIT Bank for over a year and have liked them. Currently getting 4.4% APY.

I like BOXX

It doesn't pay a dividend, but instead it increases a little each day based on interest rates.

The good thing is that when you sell it, it creates a long or short term capital gain, for which you can offset tax harvest losses and not have to pay any income tax like you do on interest income

I bleed maroon said:

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Please realize the poster said "cash", so recommendations like VOO or a bond fund have risk factors he's unlikely to accept as a cash alternative.

Money market, treasuries, or high-yield savings are all cash equivalents, to me.

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Do all of those carry FDIC insurance?

We keep about $100k in a high yield savings account as an emergency fund, but I'm also looking for better options.

Thunderstruck xx said:

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I bleed maroon said:

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Please realize the poster said "cash", so recommendations like VOO or a bond fund have risk factors he's unlikely to accept as a cash alternative.

Money market, treasuries, or high-yield savings are all cash equivalents, to me.

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Do all of those carry FDIC insurance?

We keep about $100k in a high yield savings account as an emergency fund, but I'm also looking for better options.

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Well, if treasuries default, you're certainly going to have trouble with anything else you would consider.

High yield savings are FDIC insured (I think to $250k?). Money market may be covered by SIPC or something similar (?), but probably have incrementally more risk than the other two. During the financial meltdown, the potential for money market funds losing their $1 NAV was instrumental to the bank bailouts that occurred. So even if there's no formal government backstop, they're pretty darn safe.

Effectively, they're all close enough to be "risk-free" to probably just choose the highest rate and best timeframe term (maybe considering boosted rates for less liquid choices such as a FDIC-backed CD) between them. The bond funds like the one mentioned above all have corporate bonds in them, which introduces default, counterparty, interest rate, and other types of risk. Still likely to be pretty safe for short durations, but certainly riskier than the cash alternatives mentioned above.

Anyone smarter than me think I should move to a just as safe better option?

Aggie09Derek said:

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Anyone smarter than me think I should move to a just as safe better option?

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I'm certainly no smarter than you, but I'd say you're in a pretty good holding spot, until you're ready to move it to something quite a bit risker to have access to better and more volatile potential returns (such as VOO, mentioned above).

This is a good option if the objective is principal preservation.

If you are looking for a better return but mild risk level there's a variety of better options that can offer most likely better returns (at least historically) without stock market exposure.

Standard deviation of S&P 500 is around 17. Standard deviation of money market is basically zero. Then there's a variety of options you could find with a standard deviation around 2-7 that could likely exceed the return of a money market fund. Not guaranteed of course, but worth consideration.

I have some SGOV. If you are in a state with income tax, you might be able to avoid having to pay on gains in treasuries if you want to factor that in

FDIC insurance is per depositor so if you have money in a joint account it's actually $500k of FDIC insurance.

ttt

RightWingConspirator said:

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I use TMCXX but I got in when the initial minimum investment was $100,000. I think that moved to $3MM now.

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Your Merrill advisor can buy this for as little at $1000.

TMCXX has same day liquidity. If you don't need same day, POIXX yield is currently over 4.3%.

Thinking of the amount of money the OP was playing with, why not just high interest savings account?

How about short term rental real estate? A condo you Airbnb for example? Whatever you make on rentals plus the real estate appreciation.

NVDA or bitcoin....neither have ever let me down.

You have not been holding either for more than 2-3 years then. NVDA was an absolute dog in my portfolio before OpenAI came around.

OP - read the first half of "Complete Idiot" post, and ignore the second half. Also ignore Fireman's post for your CASH ALTERNATIVE parking spot you requested.

Ag CPA said:

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You have not been holding either for more than 2-3 years then. NVDA was an absolute dog in my portfolio before OpenAI came around.

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Been holding since 2015.....it's been terrible. Here's a chart:

Again, how was it treating you before OpenAI?

$0.50 to $177. Do you understand how to measure for splits including the 10 for 1 split in June 2024? The stock has literally been a rocket ship to the moon and a millionaire maker with only a modest initial investment. Stick with your mutual funds Mr. CPA.