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How are you saving and investing your money right now? And what are you doing with existing investments (such as I-bonds) that are earning less than they were a year or two ago?
As Investopedia notes, the new composite rate is 4.28% isn't bad — but it definitely isn't the 10% from recent months.
For my $.02, we have probably too much in index funds at this point in our lives (85%+, maybe 90%+), and we always have too much in high-yield savings accounts (HYSAs), so I’ve been trying to diversify a bit with CDs and yes, some investments in 30-year treasury bonds. Our HYSAs are earning 4%, which is about what you can find in CDs now – but because HYSAs may change at any point I’m still putting money back into CDs when they come due.
We aren’t moving money out of the 30-year I-bonds because (given our lay of the land) the rates aren’t that bad, and the sums aren’t too huge a percentage… but every 6 months when there’s a new rate announced I’m trying to remember to monitor it, ha.
(We use Ally, Vanguard, and Schwab primarily, but more out of habit than anything. I find it easiest to do CDs in Ally instead of through my other online brokers – that way if they come due and I’m not paying attention, the money isn’t going to a settlement fund earning a low interest rate.)
Readers, how about you? How are you saving and investing your money right now? And what are you doing with existing investments (such as I-bonds) that are earning less than they were a year or two ago?
Stock photo via Stencil.
Anonymous
Still just CDs and index funds – trying to diversify by buying blue chip stocks instead of bonds though.
Anon
I didn’t know there was such a thing as too much in index funds. The vast majority of our savings is in retirement account index funds, and we also have 529 savings in index funds. We have an emergency fund/slush fund of about $50k in a HYSA. We had some CDs until recently but recent CD renewal rates have been <5% and the HYSA is 4.35%, and for less than 1 percentage point I would rather just have the money in my HYSA and immediately accessible.
We also have about $50k in I-bonds that are intended for kids' college (we're under the income threshold for tax breaks) and haven't touched them but haven't added more recently.
Anonymous
i think she meant for her age – the old advice was that you should hold a percentage of stocks that is equal to 100 minus your age. So if you’re 40, you should hold 60% of your portfolio in stocks.