Specialist · Member since 2025 · 32 posts · 12 votes
Hi everyone, I'm starting out and just wondering what people are using to hold their savings as they gather funds for their first investment. Where can you get the best safe return?
New to Real Estate · Raleigh, NC · Member since 2018 · 33 posts · 29 votes
1y
This may be the boring answer, but I just use a high yield savings account. The money is set to grow around 4% and your money is not subject to the volatility of the market. Sure, the interest rate may vary depending on the market, but the money itself will not be impacted, and it is always available based on your timeline.
Generally, if you have a short timeline, it's usually not advised to put money in investment accounts that are subject to the market because it's an easy way to lose the money you need for your investment if the market does any sort of correction. Then you have to wait to either save more or for the market to come back up, which obviously could impact your timeline.
I have been keeping my funds in a Fidelity Cash Management account, invested in short term treasury (SGOV). SGOV is almost entirely exempt from state and local taxes. The yield is around 4.5%. I feel this is a little bit better than just holding them in money market funds -
I have been keeping my funds in a Fidelity Cash Management account, invested in short term treasury (SGOV). SGOV is almost entirely exempt from state and local taxes. The yield is around 4.5%. I feel this is a little bit better than just holding them in money market funds -
New to Real Estate · Raleigh, NC · Member since 2018 · 33 posts · 29 votes
1y
This may be the boring answer, but I just use a high yield savings account. The money is set to grow around 4% and your money is not subject to the volatility of the market. Sure, the interest rate may vary depending on the market, but the money itself will not be impacted, and it is always available based on your timeline.
Generally, if you have a short timeline, it's usually not advised to put money in investment accounts that are subject to the market because it's an easy way to lose the money you need for your investment if the market does any sort of correction. Then you have to wait to either save more or for the market to come back up, which obviously could impact your timeline.
This may be the boring answer, but I just use a high yield savings account. The money is set to grow around 4% and your money is not subject to the volatility of the market. Sure, the interest rate may vary depending on the market, but the money itself will not be impacted, and it is always available based on your timeline.
Generally, if you have a short timeline, it's usually not advised to put money in investment accounts that are subject to the market because it's an easy way to lose the money you need for your investment if the market does any sort of correction. Then you have to wait to either save more or for the market to come back up, which obviously could impact your timeline.
Thanks, Tyler — not boring at all! That’s actually really helpful for me since I’m focused on keeping funds safe and available while I prepare for my first deal. A high-yield savings account at ~4% sounds like a solid option without the risk of losing principal. I appreciate you sharing your perspective on timelines and avoiding volatility.
Do people know of any supercharged savings products available only to accredited investors?
You mentioned "safe" and I assume you'll want quick liquidity as you're waiting for an investment of your own. Most companies like us that deal with investors need to lock up the money for a period of time as the investments that we do (lending, real estate, etc) are relatively illiquid and we have to carefully plan our scheduled liquidation "waterfall". For safe liquidity, the answer is obvious...a bank money market. Unless you're willing to lock it up for a while, that's the right call. Good luck to you, Jeax.
Do people know of any supercharged savings products available only to accredited investors?
You mentioned "safe" and I assume you'll want quick liquidity as you're waiting for an investment of your own. Most companies like us that deal with investors need to lock up the money for a period of time as the investments that we do (lending, real estate, etc) are relatively illiquid and we have to carefully plan our scheduled liquidation "waterfall". For safe liquidity, the answer is obvious...a bank money market. Unless you're willing to lock it up for a while, that's the right call. Good luck to you, Jeax.
Thanks, Doug — that makes a lot of sense. I definitely want to keep liquidity while I’m still saving up and waiting for the right opportunity, so I’ll look more into money market options. Appreciate you breaking down the tradeoff between “safe & liquid” vs. “locked in but higher returns.” Super helpful for me starting out!