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  • Writer's picture Treavor Dodsworth CFP®, CPA, CKA®

#175 - Return on Cash


Return on Cash

In this interest rate environment, it is very easy to find FDIC-insured savings accounts paying more than 4%.


I have written about this multiple times before but I wanted to highlight it again. This week I spoke to an individual regarding a prospective client with several hundred thousand dollars in checking/savings that were earning next to nothing.


The first negative is I don't believe the individual needed this much in short-term funds so she has missed out on the great year the stock market has had so far. The second negative is even if she did want to keep that much in cash it is very easy to find FDIC-insured savings accounts paying more than 4%. Simply using a different savings account would be worth $10K+ to this client.

Return on Cash

It may not seem like a dramatic difference but when the risk is so low (assuming you are staying within FDIC insurance limits) and time required to make the change is so low, it seems prudent to make the change to a savings account that is at least paying 4%.


Whether you are a client or not, I am happy to walk you through this. Feel free to reach out if you have any questions!

 

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Thank you for reading!


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