How to Maximize Returns on Portfolio Cash
A stock market run by bears makes profits tough to attain. By sitting in cash investors with the right setup can achieve stress free guaranteed returns.
The solution comes through leveraging high yield savings accounts. This post will explain how to maximize the returns on portfolio cash without fees and with great ease.
Why Sitting in Cash is Healthy
The biggest advantage to sitting in cash is the peace of mind it offers. During the bull market of the late 1990s every investor was considered a pro, but during a bear market investing is stressful and profits are hard to come by.
Sitting in cash is a temporary solution that gives investors a well deserved break. Utilized especially in personal investment accounts (typically retirement accounts hold long term mutual fund positions) it is a great strategy for the short term.
High Yield Savings Accounts Offer Liquidity and Speed
One very important reason to use a savings account over CDs (certificate of deposits) or bonds is for the liquidity. Just like a regular checking account money can be deposited and withdrawn at any time.
Another great feature of a high yield savings account is that electronic ACH transfers can be setup directly from an online stock broker account. This means that with a click of a button and more importantly for free, funds can be transferred back and forth between any broker account and savings account.
Ways to Maximize Returns
Two great high yield savings accounts that I personally have listed below. The reason I don’t use one exclusively is only because one is a joint account I use just for vacation savings while the other is where I hold any extra portfolio cash temporarily:
With an Orange Savings Account from ING DIRECT, account holders earn a variable 3.00% Annual Percentage Yield on savings every day, with a level of flexibility, freedom, and security they simply can’t find at other banks. Benefits include no minimum deposit, no hidden fees or service charges, and 24/7 account access.
The E*TRADE Complete Savings Account features unbeatable yields, with no minimums or fees in the structure. Opening an account is quick and easy, and only takes a matter of minutes.
Things to Remember
Sitting in cash when the market is difficult to navigate is very healthy. Alongside peace of mind by leveraging a high yield savings account any investor can have guaranteed returns.
Setting up a high yield savings account and linking it directly to any stock broker account will allow free electronic ACH transfers to be used which means no fees and only positive results.
Leveraging high yield savings accoutns to maximize the return on cash is a temporary solution that can be taken advantage of numerous times without hassle.
Good call Blain!
Absolutely correct. Most people wrongly believe you have to be in the market, long or short, all the time. The problem is, they are being told this by money managers who have to be in the market.
I happen to use FNBODirect. No subprime exposure. Not overly leveraged. 100+ years old.
You can check bankrate.com to see who is offering best rates and how safe your money is with them. Bankrate.com provides ratings on the financial strength of each entity.
TSSS
Agreed, great post and very well written explanation. Most investors forget about leveraging a well setup savings account as a means of yielding returns.
This blog is really nice and informative. We are pleased to know this blog is really helping people.
Nice info TSSS, bankrate is a great recommendation to utilize.
I am new here and really happy to find your blog. The explanation given is really comprehensive and informative for me