No risk investments 100K

[Let'sgoflying!]

no, not me. If I had that I'd buy an RV kit.
I do know someone who has >100K and wants to park it with minimal or no risk for 1-5 years. Needs to be fairly liquid.
Looking at CDs, seeing rates of 2&1/4% for 2 yrs.
What else should she look at?

 

[rpadula]

Under the mattress.

2.25% is about right for a two year CD. It's theoretically locked up for 2 years, but most will let you withdraw by giving up ~ 3 months worth of interest.

What are this person's goals for the money? How old is she? How much more than $100k? The limits on FDIC insured deposits are currently $250k, but that will go back to $100k in the next year or two...

 

[Anthony]

Rich. Love the pic of Bob Culp with his .45. Classic.

 

[Let'sgoflying!]

Under the mattress.

That is 'no risk'?

What are this person's goals for the money?

To invest it in a no risk vehicle that yields 15%. Really, these days just not losing it seems adequate! That's what I mean by parking it. She might need it for real estate in 5 years. Buying property now means managing it and I am discouraging that. Meaning I don't want to manage it!

How old is she?

>50 <60

How much more than $100k?

<150K

The limits on FDIC insured deposits are currently $250k, but that will go back to $100k in the next year or two...

How does that work? If she has 6 20K CDs, the bank goes tu and the fdic is 100K, are each covered up to 100K and she is golden? Or are only 5 covered?

If the latter, is she covered by spreading it around to several banks?

 

[Matthew]

How does that work? If she has 6 20K CDs, the bank goes tu and the fdic is 100K, are each covered up to 100K and she is golden? Or are only 5 covered?

If the latter, is she covered by spreading it around to several banks?

Pretty sure it's 'per account'. Can be at one bank or several.

 

[alaskaflyer]

The limits on FDIC insured deposits are currently $250k, but that will go back to $100k in the next year or two...

01/01/2014 unless the date is changed again.

How does that work? If she has 6 20K CDs, the bank goes tu and the fdic is 100K, are each covered up to 100K and she is golden? Or are only 5 covered?

Total insured deposits at each bank. Got to keep the total under $250k ($100k later.)

If the latter, is she covered by spreading it around to several banks?

Yes. Or credit unions

We're doing the same thing. Scratched our heads for a while but gave up and laddered CD's until the maturity date that we'll need the funds. 2.25% ain't bad. Sigh. Two year CD's are actually closer to 2% right now.

 

[Matthew]

I stand corrected:

From the FDIC website:
>>
The standard maximum deposit insurance amount is described as the “SMDIA” in FDIC regulations. The SMDIA is $250,000 per depositor, per insured bank, through December 31, 2013. On January 1, 2014, the SMDIA is scheduled to return to $100,000 per depositor, per insured bank, for all account ownership categories except Certain Retirement Accounts, which will remain at $250,000 permanently per depositor, per insured bank. 1.
<<

So spread it around.

 

[wsuffa]

Does she have any debt? If so, paying that off is as low-risk as it gets.

You won't see 15% no risk anywhere.

You have to watch some of the bank CDs as some of them are not covered by FDIC. Likewise money market funds.

Munis have some risk, made worse by some of the techniques used during the investment bank heyday. Still, you might look at a muni fund. Munis are tax-advantaged where most other invesments are not.... and they're generally lower risk than the stock market. But they also have lower returns.

 

[Let'sgoflying!]

Does she have any debt? If so, paying that off is as low-risk as it gets.

None now, Bill.

You won't see 15% no risk anywhere.

ya, Im clueless but that part was a joke

You have to watch some of the bank CDs as some of them are not covered by FDIC. Likewise money market funds.

Ok thanks, will ask.

Munis have some risk, made worse by some of the techniques used during the investment bank heyday. Still, you might look at a muni fund. Munis are tax-advantaged where most other invesments are not.... and they're generally lower risk than the stock market. But they also have lower returns.

Ok, will check into them, tks

Thanks all for the other thoughts.

 

[alaskaflyer]

You have to watch some of the bank CDs as some of them are not covered by FDIC. Likewise money market funds.

https://www.fdic.gov/EDIE/calculator.html

I don't believe that covers credit union searches, which are covered under the NCUSIF instead.

 

[Jay Honeck]

Looking at CDs, seeing rates of 2&1/4% for 2 yrs. What else should she look at?

For $100K she can buy a 35% share in our aviation themed hotel business in Iowa City (all she's got to do is find two other partners!), the Alexis Park Inn & Suites, and she will do a heckuva lot better than that.

Like, 15 times better.

Of course, she may have to do some actual work to net that ROI...