(Closed) Spare cash lying around….what to do?

posted 6 years ago in Money
Post # 3
Member
14496 posts
Honey Beekeeper
  • Wedding: June 2011

With only a year until the wedding and honeymoon, I’d just put it in savings.  That’s is not really enough time for me to feel comfortable investing it, espeically if you said you dont have much in savings right now.

Post # 4
Member
6015 posts
Bee Keeper
  • Wedding: March 2012

I’d keep it somewhere where it’s not a thought.  That’s a nice bit of money saved up and if you guys hit …oh car trouble … rent trouble … it’s nice to have that saved up.

Post # 5
Member
7736 posts
Bumble Beekeeper
  • Wedding: November 1999

Does your home loan let you withdraw for free? Ours does, and we always put excess savings in there. It’s generally the best value saving, and because you reduce paid interest (rather than earn interest) there’s no tax on it ether. (i.e. if you earn 4% interest on a deposit it’s taxable so you actually earn more like 3%, but putting in your loan account is equivalent to earning 5%, non taxable). But not all Australian home loans let you do this, so check your paperwork.

Post # 6
Member
10572 posts
Sugar Beekeeper
  • Wedding: January 2011

No clue how Australian home loans work, but if it’s like

@paula1248:  says, I would go with that!

Otherwise, I would look into getting a savings account where you would earn interest.

Post # 8
Member
6124 posts
Bee Keeper
  • Wedding: August 2012

I’d put it in a “high yield savings account” such as ING or something like that (they used to yield much more however).  It’ll earn a little interest, it can sit away from your checking so you don’t use it, it’s very easy to access and you can transfer it between other existing accounts.

 

Some current money market rates:

http://www.bankrate.com/funnel/savings/savings-results.aspx?local=false&IRA=false&prods=33&ic_id=CR_searchMMASavingsRates_checking_MMASavings

Post # 10
Member
10367 posts
Sugar Beekeeper
  • Wedding: September 2010

How about putting it into an IRA for retirement?

Post # 11
Member
7736 posts
Bumble Beekeeper
  • Wedding: November 1999

@Nic01:  I’m glad to be of help.

Now I don’t work in finance so I’m certainly no expert, but I have read before that a fixed interest rate home loan is often not a good idea, because if the bank is offering a certain fixed rate then they are expecting the variable rate to go lower than that. Anyway, make sure you research the pros and cons before doing it.

Post # 13
Member
7736 posts
Bumble Beekeeper
  • Wedding: November 1999

@Nic01:  Really I’m not the person to ask. I’ll just say this: why is the bank so keen to offer a fixed rate? They wouldn’t do this unless it was in their interest to do so. But I’ve got to stress over and over I’m not the expert, I’m just a 40 something woman who’s taken out 3 home loans so I’ve been around a bit. So do your research.

I did a google. Both of these sites   ( http://www.moneybuddy.com.au/home-loans/fixed-rate-vs-variable-rate-loans.html and http://www.smartsearchfinance.com.au/information/fixed_or_variable.html )said you may not be able to pay off early (exactly what you want to do with stashing away your saved money); and also that there might be fees with changing your loan.

This site (an ABC news report, so I trust it a bit more) comes out a bit more strongly in favour of variable: http://www.abc.net.au/news/2009-11-04/to-fix-or-not-the-great-home-loan-gamble/1128592 

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