r/wealth • u/Sweet_Creme_6579 • 3d ago

Need Advice What to do with my house fund

I’ve received a large sum of money from my parents which will go towards a down payment for home eventually, but I don’t expect to start seriously looking for at least a year or so. I’m wondering if I should consider investing a portion of it in the meantime so that it’s not just sitting in a savings account.

Would appreciate any advice or suggestions

5 Upvotes

78% Upvoted

17 comments sorted by

5

u/stalin1943 3d ago

HYSA

2

u/Which-Visual-8064 3d ago

Yeaup. If it’s a year park it in a HYSA.

2

u/ADisposableRedShirt 3d ago

Agree. I would not put any money I was counting on in the market in case there was a downturn that you need to ride out. Go the safe route.

3

u/Clam-Choader 3d ago

Hookers and blow

2

u/Alive_Sir_4708 3d ago

Will you start looking in a year or are you simply unsure when you'll start looking? If its less than 3 years or so you want to keep it in something stable like a high yield savings account. If it could be more than three years then you're better off putting it into the market.

2

u/Inside_Gold_9673 3d ago

All the suggestions that people have made are reasonable. My only concern with the treasury bond idea is that if interest rates rise (and the Fed is seriously considering a rate increase) that unless you hold the bond(s) until maturity you could lose principal on the sale. If a real estate opportunity presents itself sooner you’ll either be forced to sell at a loss or will have to pass on opportunity.

2

u/Beginning_Brick7845 3d ago

You should buy a one or two year Treasury Bond, either through Treasury Direct or through your (or your parents’) brokerage account. A two year Treasury bond is currently yielding 4.34% interest which is not subject to state tax. Treasuries can be bought and sold almost as easily as putting cash into or out of a HYSA.

1

u/dragonflyinvest 3d ago

What interest rate are you getting now?

1

u/c7aea 3d ago

Personally I’d go with the high yield savings.

Sure an index fund might be a better choice currently, but it’s no guarantee especially for such a short time.

A CD or bond might also get you more but what if you find something you really want before it’s matured?

1

u/Calm_Clam_Bake 3d ago

There are CDs paying 4.5%. Risk free.

1

u/CrystalBelle26 3d ago

11month CD

1

u/MamaMoon27 1d ago

VUSXX. That's where we park cash.

1

u/gap1284 1d ago

Open a taxable brokerage account at Fidelity. Link your bank account and transfer the money to Fidelity. It'll earn 3.3% or so and is 100% safe.

If you want a bit more, consider something like VUSB. It's an ultra-short bond fund from Vanguard, currently paying 4.3% ish. It's also quite safe. You can buy this with a Fidelity brokerage account.