I find it interesting that “safe” yeilds are a moving target. Comparing rates and options from the comments given just 2 years ago would not be the optimal “safe” investment for today (April, 2024). For example, money settlement funds at Vanguard and Fidelity now significantly beat HSYA accounts, such as those at Ally. The safest bet may simply be to keep short term dollars flexible, no matter what the vehicle used.
I use a 6 month T-bill ladder for the majority of my cash. I get about 40bps more than the Fidelity money market. I use a seven year ladder for muni bonds so some are always up for renewal. I keep my tax payments in a high yield account at Synchrony Bank.
I like preferred stocks as they are the first to be paid by a company and they can have higher yields. My favorites are offered as perpetual by the Federal Agricultural Mortgage Corporation a.k.a. “Farmer Mac.” Series C is paying 6% and series E pays 5.75% based on its $25 book value. The quarterly payment is the same whether the share price goes up or down. As an income investor, I don’t stress about the price of the shares. Most preferred stocks have call dates where the issuer can choose to redeem them at their $25 book value but these two mentioned continue to renew. Because these are Class A shares, they are the first paid by the issuer in good times or financial hardship.
I find it interesting that “safe” yeilds are a moving target. Comparing rates and options from the comments given just 2 years ago would not be the optimal “safe” investment for today (April, 2024). For example, money settlement funds at Vanguard and Fidelity now significantly beat HSYA accounts, such as those at Ally. The safest bet may simply be to keep short term dollars flexible, no matter what the vehicle used.
I use a 6 month T-bill ladder for the majority of my cash. I get about 40bps more than the Fidelity money market. I use a seven year ladder for muni bonds so some are always up for renewal. I keep my tax payments in a high yield account at Synchrony Bank.
Now (Aug 2023) there are one year CDs available paying 5.5%. If you are looking to place less than $240k, these are good.
I like preferred stocks as they are the first to be paid by a company and they can have higher yields. My favorites are offered as perpetual by the Federal Agricultural Mortgage Corporation a.k.a. “Farmer Mac.” Series C is paying 6% and series E pays 5.75% based on its $25 book value. The quarterly payment is the same whether the share price goes up or down. As an income investor, I don’t stress about the price of the shares. Most preferred stocks have call dates where the issuer can choose to redeem them at their $25 book value but these two mentioned continue to renew. Because these are Class A shares, they are the first paid by the issuer in good times or financial hardship.
US Treasuries