1. You should not keep more than the insurance limits in a bank account. If the bank fails, you will lose much of the excess over the insured limit. Banks are not paying you sufficiently for that kind of risk.
2. FDIC insurance is per bank, so if you keep $250 K in 3 different banks, and all three failed, you'd be covered. So yes, if you buy a CD at a different bank through Fidelity or directly, it would have separate FDIC coverage.
3. Treasuries and treasury money market funds are very safe places to keep your money in terms of default risk, and if you buy them from a legitimate broker like Fidelity you don't have to worry about limits (technically, there is theft insurance through SIPC up to $500K, but really the risk even over that is almost non-existent). I made a YouTube video explaining the different risks and structures of brokerage accounts and bank accounts.
3. If you want to keep the money liquid, then treasury money market funds are a good place to keep your money. Fidelity has FDLXX which right now pays close to 5% and is mostly state tax free. You can get a little higher yield by buying SGOV, but you have to buy and sell shares and it doesn't keep a $1 price like MM funds do.
And if you pay state income tax, most of the interest on Treasury MM funds will be state tax free. Other government money market funds are almost as safe, but you probably won't get a state tax benefit.
2. FDIC insurance is per bank, so if you keep $250 K in 3 different banks, and all three failed, you'd be covered. So yes, if you buy a CD at a different bank through Fidelity or directly, it would have separate FDIC coverage.
3. Treasuries and treasury money market funds are very safe places to keep your money in terms of default risk, and if you buy them from a legitimate broker like Fidelity you don't have to worry about limits (technically, there is theft insurance through SIPC up to $500K, but really the risk even over that is almost non-existent). I made a YouTube video explaining the different risks and structures of brokerage accounts and bank accounts.
3. If you want to keep the money liquid, then treasury money market funds are a good place to keep your money. Fidelity has FDLXX which right now pays close to 5% and is mostly state tax free. You can get a little higher yield by buying SGOV, but you have to buy and sell shares and it doesn't keep a $1 price like MM funds do.
And if you pay state income tax, most of the interest on Treasury MM funds will be state tax free. Other government money market funds are almost as safe, but you probably won't get a state tax benefit.
Statistics: Posted by classpro — Sun Sep 15, 2024 7:11 pm — Replies 7 — Views 533