Where do I put a big chunk of money?

The bits of pieces of my divorce are wrapping up and sometime in the next month I am going to get a check for my piece of the equity in our home. It's low 6 figures. I'm not in a position to purchase a home at this time. I have no reliable income to qualify for a mortgage other that spousal/child support at this time, and I signed a year lease on an apartment. But this money is "down payment for the future" in my head. Maybe in the next 2-5 years I can buy something small (cali is expensive).

Where should I put it?

I currently have a bank account at a credit union with a checking and a savings. My retirement accounts have not been transfered over from the divorce so I don't really have access to those, plus this isn't retirement money. 

Thank you!

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    • nolesrule
    • Stealing From the Future fix is an improvement but is incomplete....
    • nolesrule
    • 8 mths ago
    • 1
    • Reported - view

    Seems you don't yet have a plan for what the money will be specifically for. Keep it in a high yield savings account until you formulate an actual plan.

    Once you have a plan, then you can select the best choice of account type based on risk and time horizon for when the money is needed.

    Like 1
      • Grogu
      • Learning the Force
      • grogu
      • 8 mths ago
      • Reported - view

      nolesrule How to choose which high yield account is overwhelming. 

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      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 8 mths ago
      • 2
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      Grogu Just pick one from a major online bank. no need to spend too much time. the rates aren't going to make much of a difference.

      Like 2
      • Vibrant
      • No more counting dollars, we'll be counting stars
      • vibrant
      • 8 mths ago
      • 6
      • Reported - view

      Grogu a savings account is a savings account is a savings account. If you deposit $100K with Ally at 0.5% APY and let it sit, in a year you'll have $101,002. If you find an account that pays 0.8%, in a year you'd have $101,606. If something crazy happens and even the "high yield accounts" go back to paying 0.01%, in a year your $100,000 will still be intact, and that's the important thing.

      Like 6
      • Grogu
      • Learning the Force
      • grogu
      • 8 mths ago
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      Vibrant I got ya! I'm on it now. 

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      • Grogu
      • Learning the Force
      • grogu
      • 8 mths ago
      • 1
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      The Artist Formerly Known As I just read this article. I am very overwhelmed about these accounts and how to select which one to choose. It says that all of them can change the rate at any time. I found one with a .85% rate but is it one of those things where I will get my money in there and they next month they will slash the rate. Bait and switch??? 

      Like 1
    • Grogu all rates have been going down across the board for the past few years, so don’t worry too much about that.  Only you can decide what you’re willing to concede to get what you want out of your money. 
       

      You can pick a few off the list and then research + write down how they measure up in the following factors:

      Rate of return

      Account requirements and fees (minimum balance, restrictions on deposits, monthly fees)

      Security

      Ease of use (how is their website? Do they have a badly reviewed app)

       

      Don’t agonize too much over your choice. If you don’t like them, you can usually just close and switch to a different bank. You can never make a perfect choice, just the least bad choice with what you know now.

      Like 2
      • jenmas
      • jenmas
      • 8 mths ago
      • 1
      • Reported - view

      Grogu it's not bait and switch. It's impacted by rates set by the Federal Reserve.

      Like 1
      • dakinemaui
      • dakinemaui
      • 8 mths ago
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      Grogu Don't sweat it. IF they drop the rate more than other banks, just transfer to a different bank at that time. Most of the good ones stay within 0.1% of each other.

      Like 3
      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 8 mths ago
      • 1
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      Grogu Agreed. Just pick one. 

      Lots of people like Ally. They've been consistently a titch higher than my account, CapitalOne360 but I keep my C1360 because it's just not worth my time to close an account I've had for 16 years to chase after 0.05%. 

      You won't go wrong anywhere; it's not going to make a big difference. 

      Like 1
      • Yes I can
      • yesican2020
      • 8 mths ago
      • 1
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       Grogu in my working life, I regularly have to make decisions on suppliers for tasks and items some of which I know less about.  In some roles  projects, this is be ongoing and always in addition to lots of other work and responsibilities,  

      To stop getting overwhelmed or getting decision fatigue and make it manageable, I find three to five acceptable suppliers - usually trusted by someone credible (eg, in an article),  good to deal with and seemingly expert.   If I really didn’t know much about the area I might research it before I picked the three suppliers or reach out to people I know - just like you’re doing here - and ask then what I should be considering when buying X  

      Once I had the three to five options I’d look at their product / request quote or proposal, maybe meet with them or get details or whatever. This depending on the type of thing and how much we were spending and how long the commitment was 

      Then pick one, if appropriate in conjunction with someone else,  Sometimes just based on price / value and other times on other stuff eg. features, proposal etc. Maybe make a table showing the supplier names and details.  

      Then move on.  What I’ve learnt is mostly it’s fine.  Sometimes I make the wrong choice but that’s life.  And then you adjust and learn.  

      You got this. Don’t be overwhelmed! 

      Like 1
      • Grogu
      • Learning the Force
      • grogu
      • 8 mths ago
      • Reported - view

      The Artist Formerly Known As Thank you! I like this list of things to research! Very helpful. 

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      • Grogu
      • Learning the Force
      • grogu
      • 8 mths ago
      • Reported - view

      jenmas That sounded like I was being so mean, but I understand now. 

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      • Grogu
      • Learning the Force
      • grogu
      • 8 mths ago
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      dakinemaui Okay! 

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      • Grogu
      • Learning the Force
      • grogu
      • 8 mths ago
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      WordTenor I keep hearing Ally when I do my research. I think it's the front runner. 

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      • Grogu
      • Learning the Force
      • grogu
      • 8 mths ago
      • 1
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      Yes I can This comment made me feel really good. What a systematic approach to look at decision making that takes out emotion and just provides a process to follow and move on. I saved this to a document for future reference. Thank you for such sound, solid, and comforting advice. 

      Like 1
      • Yes I can
      • yesican2020
      • 8 mths ago
      • 1
      • Reported - view

       Grogu I’m glad I could help!

      Like 1
  • Whoops, if anyone saw my earlier response I deleted it because my math was off!

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      • dakinemaui
      • dakinemaui
      • 8 mths ago
      • 1
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      Vibrant Still is. 😋 (APY is "yield". 0.5% APY on $100k is $500 after 12 mo.)

      Like 1
      • Vibrant
      • No more counting dollars, we'll be counting stars
      • vibrant
      • 8 mths ago
      • 1
      • Reported - view

      dakinemaui 🤷‍♀️I blame the bankrate.com calculator (which is now spitting out completely crazy numbers entirely.) But at least I'm not off by a factor of 10 anymore.

      Like 1
      • Grogu
      • Learning the Force
      • grogu
      • 8 mths ago
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      Vibrant All good! I saw the math, did it on my own and was like... okeeeyyyyy, we are not talking big numbers here. 

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  • Sorry to hear about your divorce Grogu. I went through it a couple years back. It can be terrible. 

    As others have stated...just pick one. I used Amex a while back. It had like 3-4% when I did. When the government cuts rates, it affects savings accounts. It's not bait and switch but it does suck. It's also why so many people are putting their money in the market. 

    If you're really 5 years out on your purchase, invest it in something is my 2 cents. .5% interest won't keep up with inflation. Or invest half of it, keep half of it more liquid. 

    If you're really overwhelmed, just put it someplace until you have less on your plate. Good luck!

    Like 1
      • Grogu
      • Learning the Force
      • grogu
      • 8 mths ago
      • Reported - view

      BedHead Thank you for this. I hadn't even thought about investing half of it. I think I am more like 2 years out, but who really knows at this point. I think I will follow your last line because I am definitely overwhelmed. An investment option is probably more down the line. 

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  • Huge thank you to everyone for their advice on this high yield savings account situation. 

    I opened an account with Ally. I am going to park my equity there while I get my feet under me, at least another year. Then I am going to look into my time horizon for the purchase of a home, and also possible investment opportunities if I don't purchase a home. 

    I loved your words of wisdom to not stress, just pick one and go. And also the various decision making systems you all recommended. You all so totally rock and I am very thankful to be here. 

    xo

    Like 5
  • I know I'm too late but citi has a current promotion with a $700 bonus for opening a priority checking and high yield savings if you keep $50k in there for 90 days.

    Like 2
      • dakinemaui
      • dakinemaui
      • 8 mths ago
      • 2
      • Reported - view

      Herman ooo, is it that time of year again? I'm off to see if it's been long enough since I closed my account to qualify...

      Their savings rate is usually insulting, but if they'll pay me to evaluate them again, I'm game.

      Edit: I was thinking of Chase, but still a good opportunity.

      Like 2
      • jenmas
      • jenmas
      • 8 mths ago
      • Reported - view

      Herman I've done the SUBs from Citi, Chase, and HSBC in the past. I closed the last of them in 2018 I believe so I could do a round of account creation. And the 90 day time frame is a lot better than 180 days that some banks have.

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      • Herman
      • herman
      • 8 mths ago
      • Reported - view

      jenmas Since interest is so pitiful, might as well get something for your money :)

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