Invest your Savings?

[jenniferc2011 (Jennifer Coleman)]

Hi Guys,

After you have your emergency fund saved, what do you with other funds that you want to save? ie Squireling away money for a vacay- Do you still invest those funds? Or use high-interest online accounts?

Thanks!

[Jeremy (Jeremy Schneider)]

Hey Jennifer!

I wouldn’t invest anything you plan to spend within 5 years. Here’s why:

Why you shouldn’t invest your down payment for a house

In the (relatively rare scenario) that you are saving for something more than 5 years out, but definitely before retirement, sure I’d probably throw that in a regular brokerage account in index funds!

[ashfrica]

I use a high yield savings account (HYSA) for my emergency fund and other savings which generally has a higher interest rate than a regular savings account. (e.g., 1% with Ally vs. 0.01% with Bank of America). Note you can only make 6 withdrawals per statement cycle (~1 month). Which is fine since it’s supposed to sit there anyway.