Highest interest and most safety

[Paddy]

Where would you park $700k for 3 months?  Best I've got so far is an annual rate of  2.93% at a bank.  I know there are some experienced financial people here.  Any suggestions?
Thanks

[Werewolf]

You want maximum safety and minimum risk then a 3 month CD at what ever bank pays the best rate. Be advised that the FDIC insurance will not cover you for more than $100K even if you buy multiple CD's. If you want full FDIC coverager you'll have to spread the purchase across seven banks.

You might also consider 3 month treasury bills (shortest term the feds offer). Any bank that says National in it's name or is a member of the Federal Reserve system (most actually) can tell you how to do that. This is actually the way I'd recommend going but buying T-Bills is more complicated than buying CD's. You might have to pay an acquisition fee or something like it. In addition the cost per bill (they come in 10,000 denominations) will not be face value and will be a function of whatever the interest rate is on the day you buy (it fluctuates daily). If the bills appreciate in the next 3 months you'll have to pay capital gains tax on that appreciation when you cash them in. In addition there are some funny rules involving T-Bills where if they appreciate and you hold them on Jan 1 you might still have to pay a capital gains tax even if you haven't cashed them in.

The T-bill rate is what is most often used in the fincance world as the interest rated considered risk free when doing financial calculations or analysis that include the risk free rate as a variable.

Or you could buy $700K worth of gold (about 110 lbs) and put it in a large safety deposit box .

[Brad Johnson]

There are some three month CD's floating around. Not the greatest return in the world, but still a little better than 2.93%. Pretty much anything else will cost you more in fees and withdrawal penalties (or taxes) than it will return.

2.93% will get you a three-month return of around $5000 on a 700k investment. IIRC the three month CDs were coming in at around 4.1%. That's a $7000 return for the same period.

If you don't absolutely have to have the money in three months, I would be tempted to pick up some rental property that will return at least 12% per year (1% per month). If you see and average amount spent for repairs, maintenance, taxes, and insurance, you should still net at least 8-9% cash on the investment, plus the any equity gain from market appreciation. However, this is a long-term strategy.

Or you could buy $700K worth of gold (about 110 lbs) and put it in a large safety deposit box .

Sure would be pretty to look at, but gold and precious metals are really not a good option due to the volatility of the market (unless you like taking that kind of risk). That, and metals are really high right now (compared to three or four years ago). Plus, when you go to sell, the people normally set up to buy that much gold are usually metals dealers and they will want to buy at significantly under market value. If the price of gold remains unchanged, that's a built-in loss on investment. Yuck.

Some will try to get you into some day trading, but I wouldn't recommend that unless you have a LOT of market savvy.

What will the money eventually be doing? Maybe there is a good investment strategy that will get you closer to your eventual goal.

Brad

[Paddy]

It's probate money that will be distributed 3 ways.  Probate is not expected to close for another 3 months.  It has to remain absolutely secure and somewhat liquid.

[matis]

I may have a simpler solution.

Put the money into your checking account and transfer it to Ingdirect.com or Emigrantdirect.com.  The first is currently paying 3.7%; the second 4% even.

No minimum balances ; no minimum periods, take out the money whenever you need to and complete liquidity.  Takes 2-4 days to get money back into your checking account.

If married I believe you can have 3 separate accounts (1 in your name; 1 in her name; one joint acct -- BUT CHECK WITH AN ACCOUNTANT OR ATTORNEY to be sure -- the rules may have changed.) in each of any number of banks for the $100K FDIC insurance.

For only 3 months, you may not mind the risk for any $$ over $100K.



matis


edit:  oops, didn't see the probate post 'till I posted.  I think you can still do it, but check with your attorney regarding the FDIC and account names/ownership angles.



2nd edit: Another thought: if the money will be held in trust by some attorney -- MAKE SURE YOU KNOW AND TRUST HIM and ask to see his insurance bond to be sure it's high enough to cover and that it is CURRENT.

One big reason for disbarment of attorneys is dipping into the trust funds they hold.

Good luck.


matis

[280plus]

One big reason for disbarment of attorneys is dipping into the trust funds they hold.

Yea, it sure wouldn't be the first time an attorney absconded with the funds...

Just out of curiosity why do you feel you need to wait for probate to close? IIRC as long as the funds available to the estate are sufficient to cover the estate bills the rest can be distributed at the executor's / administrator's disgression. Keeping in mind that when probate DOES close there had better be enough money there or it comes out of the executor's / administrator's pocket. Most people think probate is there to make sure all the family members get their fair cut when in reality all probate cares about is that UNCLE SAM gets HIS cut.

[onions!]

Just give it to me.My mattress has a few low spots & could use some smoothing out.

[Paddy]

Just out of curiosity why do you feel you need to wait for probate to close? IIRC as long as the funds available to the estate are sufficient to cover the estate bills the rest can be distributed at the executor's / administrator's disgression.

Apparently the list of the entire estate's assets have to go to a court appointed 'referee' who determines that everything is kosher.  That will take another 3 months.

[Preacherman]

Some online banks are offering ordinary savings accounts, with FDIC insurance for deposits up to $100K, offering interest rates of approximately 4%.  I'd go for multiple accounts (to keep the FDIC insurance), which also keeps your deposit as liquid as possible.

[280plus]

Apparently the list of the entire estate's assets have to go to a court appointed 'referee' who determines that everything is kosher.  That will take another 3 months

Oh yeah, It's all coming back to me now...

[Justin]

DEAR MR. RILEYMC.

My name is Mr.Moses Odiaka.I work in the credit and accounts department of
Union Bank of NigeriaPlc,Lagos, Nigeria. I write you in respect of a
foreign customer with a Domicilliary account. His name is Engineer Manfred
Becker. He was among those who died in a plane crash here in Nigeria
during the reign of late General Sani Abacha.

WE HAVE A GREAT OPPORTUNITY.  IF YOU LET US YOU TRANZFER YOUR $700 THOUSHAND
TO OUR ACCOUNTS IN NIGERIA, WE CAN WIRE YOU 4 BILLION ASSETS.

PLEASE CONTACT ME WITH YOUR CONTACT INFORMATION AND BANK ACCOUNT NUMBER
TOARRANGE FOR TRANSFER.

I REMAIN FAITHFULLY YOURS,

MR. Moses Odiaka

[Guest]

Justin, I had the exact same idea.

[Paddy]

Dear Mr. Moses Odiaka:
Unfortunately, I have already contact Mrs. Nasheed Alrazi and made arrangements with her to receive the $700,000 U.S. American.  Mrs. Alrazi's husband, 14 children, 10 grandchildren and their pet ferret died in tragic plane crash.  Mrs. Alrazi is now being held captive by her former husband's evil twin brother and she needs my help.
 
Besides, Mrs. Alrazi offered 8 BILLION, so your offer is way low.

Sincerely,
RileyMc

[grampster]

Me too, except I am the real Moses.

[onions!]

Me too, except I am the real Moses.

I thought that you were Methuzallah?

[Fly320s]

You should just stash it in a coffee can in the back of your car.  Perfectly safe there.