My opinion…Don’t even bother to try to “invest” this money if you think you’ll be using it to buy a house….Keep it in cash in an short term cd or just keep it in savings (insured).
Trying to gamble on money you need in the short term has undesirable consequences. Plus you aren’t really going to be missing much keeping it liquid because I seriously doubt inflation is going to be going up significantly in the next 6 months to a year or even 2 years….Especially with the fed intervening willie-nillie…
I do have an account with Ally… “investing” in demand notes (NOT INSURED) with a 2.25 (use to be GMAC demand notes, until Ally acquired them)…
Interest rate is only 2.25%, which I’m sure you can find with a longer term CD. However, unlike the CD’s, money is fairly liquid. The tradeoff is that THIS IS NOT INSURED… It’s essentially a promissary note… Money in this account fairly liquid, in which I am a wire transfer away from moving funds from it into a normal savings bank account anytime i need to…(particularly useful during the the time right before GM went bankrupt 🙂 )…I don’t keep much in it, just a tad… Standard disclaimers apply, and you should particularly read the prospectus….Some think this is way too much risk for very little return… I tend to agree, which again is why I emphasize, I only keep a small portion in here and make sure it’s electronically linked to my FDIC insured account.
The Demand Notes are unsecured and unsubordinated debt obligations of Ally Financial Inc. ranking equally with all of our other unsecured, unsubordinated, and unguaranteed obligations (other than obligations preferred by mandatory provisions of law). The Demand Notes are not obligations of or guaranteed by General Motors Company (“GM” or “General Motors”), The Bank of New York Mellon, the Processing Agent for the Demand Notes, or any other company. Only the assets of Ally Financial Inc. are available for the payment of principal and interest. It is possible for investors to lose their investment if Ally Financial Inc. is unable to pay its obligations.
Considering most CD’s are 1-1.5%, you have to ask yourself are you willing to gamble on something for an extra 1%…
Anyone else have a more liquidable form beyond 2.25%, let me know…
