We’ve written about using money market funds instead of traditional savings accounts. These accounts often have even better rates than top savings account rates, and sometimes can come with a bit of tax savings as well. See the following posts:
- Brokerage Money Market & Bond Funds As Savings Account Alternatives
- Savings Taxes On Earnings From High-Yield Savings Accounts
- Exploring Brokered CDs
- U.S. Treasury Bills As High-Yield Bank Account Alternative (T-Bills)
Readers have pointed out that these accounts can also be utilized to earn brokerage bonuses. If you have large deposits sitting in a high yield savings account, consider opening a brokerage account and buying these types of money market funds or EFTs which are nearly as secure as a traditional bank account.
A similar method can be employed by purchasing brokered CDs or U.S. Treasury Bills from within a given brokerage. These are as secure as an FDIC insured bank account, and most brokerages offer these purchase options.
As an example, Ally Bank recently removed the fees for buying mutual funds. They also carry many popular Vanguard and Fidelity funds such as VMFXX which is the Vanguard default money market fund (ht MMB). Similarly, reader Matt lets us know that E*Trade and JPM Self-Directed allow the purchase of VUSXX (that’s the treasury fund we discussed in this post).
There are also ETF alternatives which operate similar to money market funds and can be utilized in the same way. Any investing platform should allow ETF purchases. Feel free to discuss possibilities in the comments below. I believe BIL, SGOV, or ICSH would be good options.
