A buddy of mine told me about Wealthfront recently and they’re 5% money market account rates.
Growing up in a world where savings accounts and even CDs never approached more than 2%, the rates on this new thing blew me away.
Free money is great, and I’d love to take advantage of these rates, but the only cash I have currently is the emergency fund I’m trying to build.
Anyone have thoughts on if putting an efund in this kind of service is a bad idea? Not sure if it’ll be liquid enough if a major expense comes up.
I don’t know this particular place, but I have my emergency fund in a vanguard money market (Vusxx), and it is super safe and returning over 5%. It takes about 24hrs to settle any sells, so I have fairly quick access to my cash
Money market is the way to go. You are exposed directly to the federal bonds, which are basically what most banks use to back their high interest accounts, so you will get the the highest rate possible with no middle man. Money market funds are not FDIC insured, but the Vanguard fund (VMFXX) has never “broken the buck” or lost value since its inception in 1981.