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Comment by hakunin | Hacker News Reader

So far each new Apple financial product makes me research and re-evaluate my options. When they announced their credit card, I got into "cash back" (thankful that I did), and ended up always getting good percentages back on every purchase. Apple Card was a jumping off point for further research. (For those curious, I ended up with Bank of America Premium Rewards at Platinum Honors tier + Amazon 5% card, Target 5% card, Lowe's 5% card, Apple 3% card, etc).

Now that they're announcing Savings, I'm thinking to re-evaluate my Ally savings account. Apple's is better, but I'm already seeing mentions of Betterment, Robinhood, and Wealthfront here. What I'm looking for is a no-fee, high yield, good FDIC insurance. I'm also looking to start a long-term investment account for my young kid, and it would probably be convenient if I could do them both with the same bank.

Any recommendations?

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I'm still very happy with Ally for general banking - still prefer their app over others that I have seen. For Savings they are still very good but also have a "No Penalty CD" thats at 4.25% APR and their "High Yield CD" is at 4.8% for 18 months

https://www.ally.com/bank/cd-rates/

For kids we did go with Chase, and I maintain a balance to avoid fees and allow for a monthly transfer for allowances. I have a recurring transfer from Ally to Chase to keep things level. Easy to setup and forget about.

https://account.chase.com/banking/first-banking

That aside... I think you may want to look at US Treasury "Series I Savings Bonds". The rate changes every 6 months but you can lock in a 6.89% for that time (if you get them before April 30, 2023). Again, you need to keep them for at least a year and other terms apply. Their website is not great but once you get over that....

https://www.treasurydirect.gov/

I recently decided to move our cash into money market funds and built https://moneymarket.fun/ to help find the highest yielding ones. Right now WMPXX is 4.9% on WellsTrade with no minimum investment. Several other options all > 4.8% as well on various other brokerages.

Fidelity and Vanguard have "core" positions (all money goes into these) that are yielding 4.4-4.7%. They're money market funds so are covered by SIPC insurance. If you're looking to open up something for your kid, might as well just open one up for yourself as well.

You wrote:

    They're money market funds so are covered by SIPC insurance.

If I understand your post correctly, this is not like FDIC insurance. Money market funds can always lose money and are not SPIC insured like FDIC insurance. (Please correct me if wrong.) What does it mean to "lose money" in money market funds? Most money market funds are buying very short-dated debt (about 90 days or less) -- like commercial paper [CP] (very popular before 2008) or US Treasury bills. For CP, these are not principal guaranteed, like US Treasuries (please ignore the Tora-Bora cave dwelling DeFi crowd that worries about the US Federal gov't going bankrupt -- I expect there will be a few replies to this post!). As a result, it is possible for the CP issuer to go bankrupt and be unable to repay the principle borrowed.

I think you are confusing SPIC insurance that covers you if the brokerage firm files for bankruptcy. No matter the losses from a brokerage firm, you will be covered by SPIC insurance as:

    The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash.

To be clear, money market funds are not cash. They are consider securities under US securities laws. You will be covered up to 500K USD. In my personal opinion, they are about 95-98% as safe as US Treasuries -- usually a very good investment.

Theoretically MM's can break the buck, there's only been like three cases ever, no one actually lost money, and even then worst case scenario they were only ~3% losses. That's why I mentioned SIPC insurance, the only real threat is the broker going under.

On Fidelity, not every account type has access to those high yielding core positions (I don't know why).

But you can choose to invest your cash directly into the high yielding money market funds by placing a trade.

The relevant tickets are FDRXX and SPAXX.

Do note that this is different than changing your core position.

+1 here. This seems like the best option for fixed income assets right now.

I personally fully expect Ally to continue being competitive as they have a history of matching rates competitively.

Sometimes there are gimmicky rates that are nice to take advantage of for a bit, but they usually have some annoying requirements to get the high rate and limit the amount you can get.

If Apple isn't losing money on a temporary rate to get some customers then Ally will have it's rate go up, as it's one of their main competitive advantages.

Also, the Chase cards are usually better to get as the opening bonuses are among the highest out there, making them far more advantageous to get for overall straight cash back. Ideally you get the less useful cards like target and Amazon after getting their line of cards. Discover and Chase often times will have Amazon and target for five percent on their quarterly cards as well.

Chase points on one of their Sapphire travel cards are also extremely valuable. Some of their travel partners can have offers that reduce the hotel prices down to fifty percent or more of the cash price. And the guaranteed increase in point value for plane tickets is also very nice. Never been able to justify the cost of their more expensive Sapphire, but the Sapphire preferred usually pays for itself after just one trip.

The one thing to be wary of is their 5/24 rule, but usually that only hits churners.

Apple's cash back is OK. If you want to play and win the points game, Amex Gold for dining/groceries and Amex Green for all travel expenses can net you some nice travel options in the future. Getting 100,000 points (the rough equivalent of $1000 cash back) can get you some nice business class seats over the oceans to EU and Asia that can be worth 5-10x the cash value of the points.

Only Apple comes with privacy guarantees.

I think this is important to emphasize. The Apple Card is the only credit card available in the US that comes with an explicit commitment not to sell you PII or transaction data.

Privacy guarantees are an undervalued benefit.

Amex Green?

https://www.americanexpress.com/us/credit-cards/card/green/

Amex is sometimes used to abbreviate American Express.

(Personally I have a American Express Blue Cash Preferred card for the 6x on groceries, streaming services, 3% on gas.)

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