SavingsTalk.com

save123

I have a company pension, and contribute weekly to a 401k, and Roth IRA. I feel I'm on the right track for my retirement goals. I have nearly no money that I can access easily though. Any suggestions on where to invest money, through weekly payroll deductions, that I could tap into easily for a vacation, auto down payment, emergency, etc.? I'd prefer not to be tied down to a CD or other plan where I'd have to wait to make a withdrawal. My Roth is with T. Rowe Price. I'd be glad to use any product they might have, but I'm unaware of anything for the short-term. Thanks.<br />

avitse1341

Check out the direct banking accounts offered by either Capital One Bank (Their High Yield Money Market account is now earning 5% interest, with no minimum balance required, and NO FEES.)
Another one I have heard of that is similar is ING. They have
a similar account earning slightly lower interest rates. They are, however, NOT a USA bank.....are based out of the
Netherlands. They have an account called ING Orange, that is the same concept....direct banking, meaning, you make deposits either by mailing them into their offices, OR you set up links to your checking account and make deposits to your savings account with them (or with Capital One...same process) by going online and setting up direct deposits from your existing checking account into their savings account.
They DO HAVE some limit as to the amount of money that can be withdrawn per month.....with Capital One, the limit is
$500 per month, I believe, but you CAN access the account at any time for that withdrawal, either by using a check or an ATM card they can provide to you.

sox

A Roth IRA is a longer term investment, and you are prevented from withdrawing any contribution for 5 years after you make it. You cannot borrow from an IRA

Your company pension or 401-K may have some loan provisions for borrowing but they maybe be limited to things like medical expenses, home purchases, to prevent bankruptcy. Check with your plan administrator or HR.

Short term there are some money markets that pay rates similar to 3-6 month CDs

jeff

You can just go to your local bank and open a checking account or a money market account with check writing privileges. Money market accounts usually require a minimum deposit and a minimum balance but pay out better interest rates than checking accounts, which do not require a minimum deposit or minimum balance (as long as the balance isn't negative).

alexanra

I'm a big E*Trade person because they provide a lot of services for little cost.

For example, if you are investing in mutual funds in Roth IRA, E*Trade refunds 12b1 fee for quiet a few funds not to mention a lot more choices than T. Rowe Price which sell mostly their own products.

You could open savings account at E*Trade which currently paying over 5% interest. You can easily transfer money online from savings to Roth, if choose to.

BTW. You can withdraw contribution from Roth IRA any time without penalty and tax consequence. Notice - I said contribution. The 5-year limit previous answer mentioned has to do with qualify versus non-qualify distribution of withdrawing conversion (converted from Traditional to Roth) or earnings. Distribution from Roth causes a lot of confusion for people.

Although I wouldn't recommand you take money out of Roth for vacation, however if in case of emergency the money is available to you. Make sure you are keeping track of your basis.

Best wishes.

kevin

I love ING direct. You can transfer from your savings directly into your checking in roughly 2 days.

Minsk

Congrats on the saving you are already doing.

I use a Vanguard Money Market Fund. I am pretty certain you can put money into it from your paycheck, and the money market returns a better rate than a savings account. If you want to stock with T. Rowe, ask them if they offer this kind of fund. Make sure you are not going to pay extra fees. I am a huge fan of Vanguard because of their low fees, service and variety.