Where to Keep Your Cash for the Highest Return

Summary

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Podcast Summary: "Where to Keep Your Cash for the Highest Return"

Podcast: All the Hacks: Money, Points & Life
Host: Chris Hutchins
Date: July 22, 2026
Episode Focus: An in-depth guide for maximizing returns on idle cash, balancing interest, liquidity, taxes, safety, and making the most of bonuses and unique financial products.

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Main Theme & Purpose

Chris Hutchins leverages his expertise and personal recent experience with a cash windfall (from the Wealthfront IPO) to help listeners identify the smartest, highest-yielding—and safest—places to park their cash. He breaks down a wide array of account types, evaluates trade-offs (particularly around friction, taxes, and liquidity), and incorporates insights from his proprietary comparison tool. The episode emphasizes actionable, optimized strategies for a variety of financial situations and tax brackets.

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Key Discussion Points & Insights

1. Why Optimizing Cash Placement Matters

• The difference between account choices can mean thousands per year in lost or earned interest ([00:05] Chris Hutchins).
• Even well-informed savers often leave money on the table due to inertia or lack of awareness.

2. Purpose and Amount of ‘Cash’

• Cash needs vary: emergency fund, tax payments, upcoming expenses (e.g., tuition, renovations) ([00:52] Chris Hutchins).
• Liquidity (accessibility when needed) is critical, sometimes more so than squeezing out the last bit of yield.
• Quote:

  “For some people it might be one or two months of spending. For some it might be six to twelve...the way you feel about the market right now might change that amount.” ([01:33] Chris Hutchins)

3. Why Not Just Invest It in the Market?

• Money you may need within five years should not be in stocks due to volatility ([02:48] Chris Hutchins).

4. How Taxes Change the Game

• After-tax returns—not headline rates—should be your focus, especially in high-tax states like California ([05:37] Chris Hutchins).
• Certain accounts, like Treasury bill ETFs, are exempt from state tax.
• Quote:

  “That [state tax] exemption only matters if a fund qualifies...some have lost that status, so check before you assume.” ([05:37] Chris Hutchins)

• Muni bond funds could be surprisingly strong after-tax options for high earners.

5. Unique Account Structures

• Bask Bank’s mileage account: earns American Airlines miles instead of cash; due to IRS undervaluing miles, savvy users may get “tax alpha” ([06:59] Chris Hutchins).
• Complexity and value depend on your travel habits and how you redeem miles.

6. Caveats with High-Yield Accounts

• Affiliate-driven sites don’t always show the full landscape (e.g., Wealthfront’s “not-a-bank” account excluded from some lists) ([03:44] Chris Hutchins).
• "Mega banks" (Chase, BofA, Wells Fargo) pay almost nothing—avoid for idle funds ([13:07] Chris Hutchins).
• Online banks, fintechs, and credit unions offer much higher rates; check Doctor of Credit for updated options ([13:32] Chris Hutchins).

7. FDIC/SIPC/Safety Layers

• FDIC insurance is $250,000 per depositor per bank, with ways to increase coverage (e.g., using fintechs that sweep deposits across many banks) ([15:20] Chris Hutchins).
• Brokerage-held Treasuries are backed by the government, not FDIC, but equally safe.
• Beware of fintech intermediaries—record-keeping failures can delay access.

8. Short-Term Bond & Treasury Options

• Money market mutual funds, T-bill ETFs (e.g., VUSB, SGOV, VBIL): easy from a brokerage account, low friction, often higher after-tax returns for high-earners ([21:47] Chris Hutchins).
• Direct T-bill buying locks rates for a period, but is less flexible.
• Fidelity/Vanguard/Schwab cash management accounts blend checking features with investment flexibility, though optimal funds may require manual intervention.

9. Bonusing & Promo Rates: Supercharging Yields

• Many banks and brokerages offer bonuses (cash or promo rates); these can boost effective APY, especially if you move money strategically ([28:56] Chris Hutchins).
• Bonuses are taxed as ordinary income; the utility depends on size and your willingness to “cycle” accounts.
• At scale (millions), some institutions will negotiate custom bonuses if you ask ([31:44] Chris Hutchins).

10. Notable “Hacks” and New Products

• Silo Markets (Interactive Brokers-based): Points-earning brokerage account—a hybrid between bank/credit card rewards and high-yield deposits ([34:25] and following).
  • Earn points on balance, cash out for gift cards/cash, or soon transfer to travel partners.
  • Offers strong transfer/welcome bonuses via referral links.
  • Reimbursement for certain credit cards (like Amex Gold/Platinum, Costco) for larger deposits—potential for significant after-tax advantage.
  • Safe because funds are truly held at Interactive Brokers.
• Bask Mileage Savings: For American Airlines enthusiasts, delivers disproportionate after-tax value if you are skilled at maximizing mile redemptions.
• X Money (formerly Twitter): Offering eye-popping, likely-unsustainable APY in early access—don’t count on this for the long-term ([44:10] Chris Hutchins).

11. The Human Factor: Friction, Simplicity, and Personal Fit

• Optimal yield means nothing if friction keeps you from acting or complicates your financial life.
• Sometimes it’s worth paying a small fee (e.g., Mercury’s 0.1% charge for seamless bank/investment transfers) for simplicity ([47:45] Chris Hutchins).
  • Quote:

    “Sometimes you let trying to get the best deal or avoid the fee get in the way of doing the thing that's simple.” ([47:45] Chris Hutchins)

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Notable Quotes & Memorable Moments

• “The difference between the best and worst place to put your cash can cost you thousands or even tens of thousands of dollars a year.” ([00:03] Chris Hutchins)
• “I found I was leaving real money on the table in my own setup.” ([00:15] Chris Hutchins)
• “If you search online for ‘best high yield savings account,’ you will find an incredibly large number of affiliate managed sites… they often don’t have all the options.” ([03:46] Chris Hutchins)
• “Your after-tax rate is really much more relevant because the tax treatment… is very different.” ([05:36] Chris Hutchins)
• “If you're at the highest tax brackets… S. Gov is at 3.66%, but on an after-tax basis that's 2.17%, while Wealthfront's at 3.55% but after tax is 1.63%... the difference is really meaningful.” ([46:49] Chris Hutchins)
• “Sometimes you let trying to get the best deal or avoid the fee get in the way of doing the thing that's simple.” ([47:45] Chris Hutchins)
• “If you value American Airlines miles at one and a half cents or more… the Bask mileage account can be among the highest returning.” ([53:10] Chris Hutchins)
• “For me, one or two brokerage bonuses a year is about all I can handle before the overhead becomes so much I’m not doing it.” ([55:37] Chris Hutchins)

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Timestamps for Key Segments

• 00:15–02:45 — Why this topic now: Chris’s personal cash windfall and framing the episode.
• 03:44–05:36 — How online reviews miss options, affiliate sites, and tax nuances.
• 05:37–09:35 — Tax efficiency: State/federal taxes, unique assets taxed differently (munis, Bask Mileage).
• 13:07–16:40 — Breaking down conventional high-yield savings accounts vs. mega banks.
• 15:20–20:51 — FDIC coverage deep dive, fintech safety, and record-keeping risk.
• 21:47–29:00 — Treasuries, brokerage cash management, and “synthetic” cash (box spreads etc.).
• 28:56–34:25 — Bank, brokerage, and cycling bonuses—how to stack yields.
• 34:25–41:25 — Silo Markets walkthrough: points, credits, safety, referral bonuses.
• 44:10–45:44 — X Money’s unsustainable offer, “normal” high-yield options benchmarked.
• 46:47–47:45 — After-tax returns in the top brackets; why friction and inertia matter.
• 47:45–56:00 — “Set and forget” vs. chasing every bonus, personal reflections on what’s practical.
• 53:10–54:45 — Bask Mileage as a top option for travel hackers.
• 56:34–57:45 — Final summary and host’s personal play (Mercury, Wealthfront cash, SGOV ETF).

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Summary: What Should You Do With Your Cash?

If you’re in a low-tax bracket:

• Shop for high-yield savings accounts (4% is the current target).
• Use reputable online banks/fintechs, check Doctor of Credit for best rates and promos.

If you’re in a high-tax bracket or in a high-tax state:

• Seriously consider brokerage accounts holding T-bill ETFs or money market funds (SGOV, VUSB, etc.) for state tax exemption.
• Stack brokerage bonuses (e.g., Silo Markets, Wells Fargo Premier).
• Consider the value and friction of each option, including promo stacking.

If you’re a travel/miles enthusiast:

• If you can redeem Amex Airlines miles at high value, explore Bask’s mileage account for unique after-tax arbitrage.

If you want ultimate simplicity/low friction:

• Use platforms that blend spending and saving seamlessly (Mercury, Wealthfront Cash), even if it comes with a modest fee.
• Prioritize user experience and operational ease over chasing every extra basis point.

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Tools & Links

• Chris’s Comparison Tool: Linked in show notes and available at AllTheHacks.com (customizable by cash amount, tax bracket, account splits, horizon, value of points/miles, etc.).
• Doctor of Credit Rate Post: For up-to-date high-yield savings and bonus offers.
• Silo Markets Referral (brokerage bonus): allthehacks.com/silo

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Final Takeaway

Chris wraps up with this advice:

“Hopefully this is helpful to everyone listening. Sometimes the easiest solution, even with a small fee, is better than the highest-earning but most complicated one... Let friction and your actual likelihood to act guide your ultimate choice.” ([49:05], paraphrased)

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Next Steps: Play with Chris’s tool, read Doctor of Credit, and take stock of your tax bracket, cash needs, and fears around friction. There is no universally perfect option; the best move harmonizes your yield, effort, and peace of mind.

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Transcript

[Chris Hutchins]

The difference between the best and worst place to put your cash can cost

[Sponsor/Ad Reader]

you thousands or even tens of thousands

[Chris Hutchins]

of dollars a year. And even if you think you've got a good setup, because I know I did. After going deep on almost 100 different

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accounts, products, banks, brokerages and funds, I

[Chris Hutchins]

found I was leaving real money on the table in my own setup. So today I'm going to dig into why even the top high yield savings accounts can still lose the bank and brokerage bonuses that quietly push some pretty unlikely options to the top of the list. And ultimately, how to land on the right move for your money, whether you're working with $10,000 or a few million, and whether you're in the top tax bracket in a state like California or paying no state taxes at all. I'm Chris Hutchins. If you enjoy this episode, leave a comment or share it with a friend. And if you want to keep upgrading your money points in life, click Follow or subscribe.

[Co-host or Guest]

Okay, so the reason this episode is

[Chris Hutchins]

coming up right now is that for a handful of years I worked at Wealthfront and fortunately Wealthfront got to point that they went public a few months ago in December and the lockup finally expired. And while the IPO performance wasn't what I had hoped, I do have some cash. Some of it which needs to be paid to the irs, and some of it which I need to figure out what to do with. And so thinking about where to put this cash, especially the cash that I need to pay the irs, you know, by the end of the year or maybe some of it in April, I've really been thinking about where cash needs to go. And historically I've had cash sitting around for regular, everyday expenses. I like to keep a little bit of an emergency fund just in case we need cash. Sometimes things happen and you forget that you need cash on hand for something. Whether it's a renovation, whether it's a tuition bill that's due, it's always nice, in my opinion, especially when certain things can't always be easily or cheaply paid by a credit card to keep just some amount of cash on hand. When you run a business, there's often times where you need to make estimated tax payments or even if you're running payroll. You know, you want to make sure you have cash on hand to make payroll or retirement contributions. And so I always like to keep some amount of cash on hand for each person. That amount's going to be different. For some people it might be one or two months of spending. For some it might be six to 12 for some. The way you feel about the market right now might change that amount. But whatever it is, whenever I have money that's sitting in cash that's not invested in the market, the goal is for it to earn the most amount possible. But it's not just the most amount possible, it's the most amount possible. That both fits the liquidity constraints. Because if I could tell you there's a way to earn a ton of money, but you can't touch that money if you need it, that might not be an option, but it's also to earn the most amount possible in the easiest way. And by the time we're done with this episode, you'll understand that there are ways to eke out a little bit of extra, but it takes a lot of work and it's up to you to determine whether that extra work is actually worth it.

[Co-host or Guest]

So that's how I think about cash

[Chris Hutchins]

when it comes to just investing the money in the market. The primary reason I don't consider the stock market a place for cash is that on any given day you can see a swing of plus and minus 1%, 5%. And historically we've had days where the market's gone down 20 or 30%. So if you need money, and you're gonna need that money accessible to you in the near term, I don't like to keep that money in the market. The market for me is for money that I'm not going to need to touch for at least five years. And so that's why I'm thinking today, this is the day not to talk about the stock market, not to think about long term investing, but to think about where to put your cash. And this is not just relevant because of my situation, but there have been a lot of changes recently. There've been a lot of big brokerage matches in the past few years. And cash matches where it's move your money here, get 1 to 3%, those are dead. The Fed was expected for a long time to lowering interest rates. I remember that that was everyone's expectation was interest rates are going to the ground and that hasn't happened. And if you look at the Fed Watch tool and you look at the odds people give, or you look at polymarket or Kalshi, it looks like rate hikes are probably more in our future than rate drops. And there are a handful of new offers. And one in particular that I think really set itself aside as one of the best places to put cash. I also think one big important thing to consider is if you search online for Best High Yield Savings Account, Best best interest on cash, you will find just an incredibly large number of affiliate managed sites on places like nerdwallet and Bankrate where you will see a bunch of options. And those options aren't misleading, but they often don't have all the options and they might be framed or scoped to a very specific type of account. I remember when we were at Wealthfront, we'd built the cash account and we were trying to get it listed as the best high yield savings account. But Wealthfront is not a bank and that account is not legally a savings account because it is technically an account that sweeps to other savings accounts. Sure, it has more FDIC insurance than the average savings account, but for whatever reason it wouldn't be allowed to be in that list, even though functionally it was very, very, very similar. So today I'm not going to focus on one list. I'm going to focus on all the places you can put your cash that offer you the kinds of liquidity you get with cash, where you can take your money out and access it as soon as you need it, and focus on how they compare, how they differ and where you can get the most. Because it's not where my money was sitting before I started researching this episode. So let's first talk about the most important thing here, which is I am not going to frame everything in the form of what is the rate you will get, because your after tax rate is really much more relevant because the tax treatment of all of these different products is very different.

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Why is that?

[Chris Hutchins]

Well, there are some products like treasury interest t bills and ETFs that invest in Treasuries that skip state tax entirely. For someone in a state like California, that could be 13.3% head start, that's really, really valuable. 13.3% off of, you know, something like a 4% return is a really significant amount of money and could really have an impact on your yield. But one thing important to understand here is that that exemption only matters if a fund qualifies. And so certain funds have qualified or not qualified because they don't meet the mark of having a majority of their assets in things that are considered zero to state tax on. And notably one Fidelity fund, Spax, failed that test recently. And so those changes are important because you might be thinking that where you're putting your money has that tax edge and it might not. Now, fortunately, Infidelity's Cash management accounts. We'll talk about this later. There are other options, but they can't actually be your core position. So I'll explain that distinction later. But that's just something to keep in mind is that the taxes on these accounts matter. And so I want to look at this on a after tax basis, not just state taxes. One other interesting thing is there's a unique account offered by Bask bank called the Basque mileage account, and they pay their interest, quote unquote, in the form of American Airlines miles. And you might ask like, well, what if I don't want American Airlines miles? Well, then, yeah, this is not relevant to you, but if you did, what's actually relevant is what is the value of what you're getting on an after tax basis. And one of the things here that works to a lot of people's favor is that there are ways to make American Airlines miles worth almost nothing, right? You could redeem them in very, very suboptimal ways. If you're listening to the show, you're probably not one of those people. But because of that, the 1099 you're going to get at the end of the year from Bask bank values those American airlines miles at 0.42 cents per mile, which if you ask me, American Airlines miles are probably worth closer to 1.2 1.5 cents per mile. So you're actually getting a little tax alpha, if you will, because you're paying taxes on something that's worth an amount that you value more than that tax valuation is being used. So again, in this case, if you look at this on just A, I'm earning 1.75American Airlines miles versus, let's call it 4%, you know, you would have to value those American Airlines miles at more than 2 cents for that to win. However, because of the tax 1099 valuation being so low, you might actually find that you're actually getting a lot more from earning miles than you would think. And then last, there's a few other options that are taxed just very differently. So I'll get into kind of some of these weird synthetic cash options like box spreads and ETFs that cover that, because in some cases they're structured in a way that you earn capital gains, or maybe you earn a 6040 blend of capital gains and income tax. So most of these options, high yield savings account, some of these ETFs that earn interest, that's taxed as ordinary income, which is why your tax rate really matters. This isn't usually a capital gain situation. So if you are in the low capital gains bracket, you could Pay zero federal taxes on capital gains. And at the highest, you could pay 20%. On top of that 20%, there's your net investment income tax, which over certain thresholds, I think it's around 250,000 filing jointly. There's another 3.8% that's going to come in on this investment income. So at the highest level of taxes, you could be paying 37% federal, plus 3.8% for the net investment income tax, plus 13.3% in California, which, crazy as it sounds, exceeds 50%. You know, that's 54.1%. So the tax situation really, really matters. And then in some states like California, there are muni market funds that are tax exempt not just from California taxes, but also from federal taxes, which, you know, they might have a much lower return on face. But if you factor in taxes, that could actually be a better option. We'll actually get into whether it is or not. Another factor that I just want to flag is how sticky the rates are, because one thing that I remember from my time at Wealthfront is we were watching certain bank accounts offer these promo rates where they would try to win customers by saying, you know, right now we're four and a half percent, and then three, six months later, they drop their rate to 3%. And so if you're constantly chasing all of these institutions that say they have the best rates, but those rates are changing, and you're constantly moving your money around, when that money's in flight between accounts, you're earning nothing. And so that's important. And then how long those rates are locked in. You know, if you're in a Treasury etf, the rate's changing daily. If you're in a cd, you might be able to lock that rate in for six or nine months. And if you're in something like an I bond from the US Government, those rates only change every six months. So that's something to keep in mind. A lot of times, the Federal Reserve rate hikes are what drive a lot of savings account changes. And so even though you might see the changes in a Treasury bill ETF or in the price of treasury bills, savings accounts might not change until that rate change happens. This episode is brought to you by Whisper Flow.

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You know that moment when you've got 30 seconds, you're between meetings or waiting in line, and there's a message you've been meaning to send, but it'd take too long to type, so you just push it off again. That's where Whisper Flow has really changed things. I just Talk for about 20 seconds and it shows up written out, cleaned up and and in whatever app I'm already in on my phone or computer. Two reasons it works. First, talking is faster than typing. Not just in words per minute, but because typing makes me want to edit as I go and talking lets me just flow. And second, this isn't Siri or your phone's built in dictation. Whisper Flow cleans up the filler words, gets coworkers names right, formats lists as lists, code as code. I can ramble and it gives me clean text. The other thing I didn't expect. My AI prompts get noticeably better once I started talking to them because I start including context, I'd never bother to type. Whisperflow works anywhere. You'd type Gmail, Slack Notion Cursor on Mac, Windows and iPhone. Try it free@whispersflow AI allthehacks that's whisperflow AI allthehacks link's in the Description this episode is brought to you by Quints. I want clothes that feel easy, comfortable and put together without needing to think

[Chris Hutchins]

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[Co-host or Guest]

In fact, I just picked up a

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[Chris Hutchins]

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[Chris Hutchins]

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[Chris Hutchins]

all of the options and then I'll just run through how I'm thinking about it. One of the things I did, and I'll share it in the show notes if you wanna follow along, is I built out an entire model using Claude for looking at all these options. And I didn't build it with Claude code. I didn't build it and host it on a website. This is something I built within Claude using their artifacts, which are like publishable sites that have functionality that you can build right in a standard chat. I've started to get a ton of value out of this because you don't have to worry about the maintenance of building a website, hosting it, using it when you're not at home on your computer. So I'm just going to publish it and share it. And look, it's not something that I went through every single little detail, so there might be one or two things that are slightly wrong. Maybe the requirement for a bonus, maybe the actual rate. I did a pretty good job of spot checking as much as I could, but for the sake of actually running through options and under understanding things, I did review a lot of the top choices. So I think it's going to do its job. But it'll also give you a good example of the kinds of stuff you can build within a chat without having to go actually build software and code anything. So what are the options? So the worst option, which I'll start with is just your mega bank checking and savings accounts. This is open up account at bank of America, Open up account at Chase, Open up account at, you know, Wells Fargo. Almost every one of these checking and savings accounts is going to earn as close to zero as possible. Maybe it's 0.01%, maybe it's 0.03%, but it's basically nothing. And so if you're parking any meaningful amount of cash in these accounts, you're going to be disappointed. Next is kind of the market for high yield savings accounts. And my favorite resource as a directory of this is a constantly updated blog post on Doctor of Credit. I'll link to that in the show notes and it's a top high yield savings account post. And if you look at this at the high end, there's accounts like Elevault, which is kind of a younger fintech company, where you can get 4.34% that is only on the first 500,000, which covers most people's situations. And then as you go down, there are credit unions that have 4.25%. There's a big cluster around 4%, and then it kind of drops all the way to, you know, somewhere around 3% and between 3 and 4.3% there is just a ton of options from credit unions, fintechs, regular banks. And you might be asking yourself, why is it that all these people are offering such a better rate than Chase or Wells Fargo is? And the short answer is that because Chase and Wells Fargo don't have to. In fact, if you look at the disclosures on a lot of these other options, some of the money is actually being stored at banks like Chase and Wells Fargo because they can't attract enough dollars for all the lending they're doing, which is what's happening on the other side of this. Right. In order for them to be able to pay you some percentage on your cash, they're taking that money and they're lending it out to other people. And Chase and Wells Fargo, they need funds in their accounts to be able to lend. And so they need to attract deposits. But if Chase goes ahead and says, hey, now we're going to offer 3% or Wells Fargo does, they have a problem because now they have to pay it out on the millions, billions of dollars that are currently in their bank accounts earning nothing. And so what they often do is they go to other partners or they create other products that earn more, that don't kind of cannibalize their existing market. And so sometimes you might actually have your money in Chase or Wells Fargo, even though you think it's in a fintech like Wealthfront. That's one way. And then the other way is there are online banks like Marcus and Ally, they kind of skip the branch process and they pay much higher rates and they're just going after a different market. They're not as much trying to be your branch on the corner traditional everything account. And so they know they need to do something to compete and they offer higher rates. I find often they offer higher rates, but not the highest rates. But they often offer them in accounts that pair really nicely with an account that has a lot of checking features. And so back episode 177, probably 2ish years ago, maybe a little more, I ran through what the best bank accounts are to earn the most on your cash. This is not that I'll cover some of those features, but the main difference here is I'm talking about where to park cash that you could maybe have it in an account that you can't spend out of some of these accounts you can, and I'll flag when that's the case. But this is money that maybe you're saving for a down payment, maybe you're saving to pay a tax bill, maybe you're waiting to invest for whatever reason. You have cash and you don't need to be able to pay off a credit card from the account, you don't need to be able to withdraw it from an atm, but you do want access to it, right? You want to be able to get access to it when you need it. And that need could be tomorrow. It could be, we found the house, we want to wire the down payment, and I don't want it to be locked up, but I don't need to pay out of that account. So the episode I did a couple years ago is about accounts that can be your primary checking account, and then this is about account where you can put your cash. It turns out that some of the best options here can also be your primary checking account, but not all of them. Now, one other thing to consider as you're thinking through these options, especially if you're someone who has a lot more cash that you're trying to save, is, is my money safe when I'm using some of these options? And so I think it's important to understand FDIC insurance, which is something that protects your cash and the government kind of insures, and that is $250,000 per depositor, per bank, per type of ownership. And so if you have a joint account, you'd get 500,000. But if you and your spouse had a joint account and then you separately had a account in a revocable trust, you could put 500,000 in the joint account. I can't remember whether the trust account is per trustee or per account, so I'm just going to not answer that. But you get separate amounts per account, per entity, per bank. But also there are a lot of banks and even fintech companies that work with a series of banks to be able to offer a lot more FDIC and coverage. So I think Wealthfront's at 8 million across 32 different banks so that they're able to spread your funds out all in FDIC assured insured accounts, but really give you a lot more FDIC coverage so you can feel confident about your cash. And so if that were a joint account, I believe that number would be 16 million. I think Mercury has $5 million of FDIC coverage. Robinhood has, I think, two and a half million. I can't remember all the numbers, but a lot of them have higher FDIC coverage. So this is something that's important to you if you have more than 250,000 or if it's a joint account, 500,000. This is something that is probably less important if you don't have that much cash in terms of exceeding the limit. It's definitely important that you put your money somewhere that you can trust and that is safe. There are a lot of brokerage accounts here that we're going to Cover and brokerage funds. And so you don't have that FDIC coverage, but the underlying asset has coverage. So if the underlying asset you're buying is a government bond or a government bill or treasury, you have that same backing of the government at the full amount, because the full amount is a government obligation. Now, when you're putting money in transit, there's SIPC coverage, which is from sipic. That's another type of coverage that covers your brokerage accounts. This isn't going to be the deep dive into that, but it's just something to consider that some of these options are brokerage accounts. Maybe those brokerage accounts work with this network of banks that they sweep the money into. And then some of these are just regular banks and credit unions. And then the last element here is just how much friction there is, because this is where my challenge has been. There are some of these options that might exist, but they require you to set up a new account at a new institution and send your money and maybe buy an etf. And you've got to ask yourself, am I going to do that? Because if you are, great. But if something is so complicated that it creates friction and that friction prevents you from doing it, then what you might be doing in the meantime might not be that optimal. So I'll get to a really practical example for myself where that mattered. And for some of you, that might be where having an account that you can treat as your primary bank account and earn interest is better than earning more interest on your cash because you're actually going to use it.

[Co-host or Guest]

And so I'd be remiss if I

[Chris Hutchins]

didn't also mention that there was all kinds of craziness in the recent past with a couple fintechs where even though the money was in an FDIC insured account and consumers were protected in the sense that the money was protected, there were fintech layers sitting in between the app they were using and the accounts. And this is kind of the whole synapse yada situation was that no bank actually failed, but all the record keeping from the people in the middle created a big problem that took a long time. I'm not even sure if it's done, but like, it took a long time to be able to get people their money. And so one of the things that I always consider when I'm looking at options, especially new options, is like, how many different layers are there here? How long has this company been doing this, what software they're leaning on? And that's something that is worth considering as you Explore some of these options just to make sure you don't end up in a situation like that.

[Co-host or Guest]

So that was a bit of a deviation. We talked about regular bank accounts, we

[Chris Hutchins]

talked about high yield savings accounts.

[Co-host or Guest]

The next big thing here is Treasuries

[Chris Hutchins]

and other short term bond like investment structures. Most of these are structured in the form of either actual Treasuries or bonds you can buy or much more simply ETFs that hold those Treasuries or hold those bonds. You can buy short term bond funds, you can buy high yield bond funds. For the sake of this conversation, I am actually not going to consider a lot of bond funds as places to park cash because I personally think when you're investing in a company corporate bond, I'm thinking there's both the interest you're earning but then there's some risk of default of this company. It's like an effectively investment in that company, which I'm going to put that in the bucket of like equity risk. For me, if I'm investing cash, I don't want to take risk on companies. And that's for my long term investing, that is not for this. So I'm focused on Treasuries here. The easy, simple way to do this is there are money market funds and there are treasury funds like VBill S. Gov. On the money market side there's VUSXX, there's a ton of these. And you can invest from a brokerage account into these options to earn interest on cash and they have expense ratios. So there is a little cost above actually buying the Treasuries themselves, which you can do in a lot of these brokerage accounts or even directly from the US Government, you can buy these Treasuries and I think you can do that. And there are people that want to learn how to do that. But the fees on these much simpler options of investing in ETFs are as low as 0.06%. That's from VBill, the Vanguard ETF. So when it comes to ease, I've never gone down the path of buying the Treasuries myself. I think the one situation where that could change is if you really care about the length of time. So instead of owning a fund that has a series of maturities, if you say I want to buy Treasuries that are three month Treasuries because I want to lock in this interest rate for exactly three months, knowing that in three months I will get that money back and whatever the interest rate at that time is is what I'LL have to lock in versus investing in an ETF where they're just buying a bunch of zero to three month Treasuries and spreading that out and rebuying them as they come up. And kind of you're just getting, you know, whatever that interest rate is. So that is a reason to buy Treasuries directly. I've never gone down that path. I'm not going to talk about it in any detail, but you could do that if you wanted to. Now, the bridge between a bank account and a brokerage account with Treasuries are things called cash management accounts. Fidelity has one, Vanguard has one, Schwab has one. Where you basically have a brokerage account, but you can treat it like a bank account because you can get a debit card, you can send ACHS and wires, you can write checks, you get account and routing numbers, you can pay your credit card bills. Many of the default positions that you can have in those accounts are not the highest earning options on the spectrum. And so like I mentioned, SPA XX is one of the core positions on Fidelity, but it no longer meets that state requirement. And there are other options you can put your funds in. And so I know with Fidelity there's FDL X X which is a manual buy that is a better option for tax treatment in high tax, but that's a manual process. You have to deposit your money and then you have to move it into that thing. And for me that's a lot of friction for an account where money's constantly coming in and out. I almost think it's easier to say here's where I'm going to just leave my cash and I'm not going to worry as much about the interest and then I'm going to move it somewhere else where I'm just going to buy a best in class option, whether that's high Yield Savings, whether that's a brokerage ETF in Treasury. So that's something to consider. And honestly, the real allure of a lot of these treasury options is around the tax savings for someone in a high tax state. So if that's not you, then the high Yield Savings account may be a way, way easier option. Now I'll briefly talk about this kind of box spread area and this is not something I have a ton of expertise on. But the general idea is that you can create kind of a synthetic zero coupon bond by buying the box in. The box being you buy a call and sell a put at one strike price and then you sell a call and buy a put at a separate strike price so you have this kind of like box and they pay exactly the difference between those strike prices at expiration. No matter where things land, when you buy that below face value, you're kind of lending at the implied rate and the discount that you get is actually kind of your interest and you can do this. And I believe that that ends up getting priced a little bit above T bills. But I would highly encourage you to understand this. There are some ETFs, I think there's SPX and BoxX that kind of wrap these in different ways. I'm not going to go down this path because when I looked at it it looked like the incremental edge was not 30% more. It was small enough that I haven't

[Co-host or Guest]

gone down this path.

[Chris Hutchins]

I would love if you think I'm wrong and I should, let me know. I know there are some options to earn capital gains instead of interest income which would be tax at ordinary income. So that can be better. The model I built factors that in and I just didn't see something that was so much better that made me think differently.

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[Chris Hutchins]

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Again, that's allthehacks.com deleteme this episode is

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[Chris Hutchins]

Trustandwill.com allthehills there's something that I think people don't talk about in most of these, which is bonuses that you can get paid to park your money in all of these accounts. Because sometimes There might be two accounts and one might pay 4% and one might pay 3%, but the one that pays 3% might give you $1,000 to move your money there. And if you amortize that thousand dollars over how long you have to keep that money there, it can actually be a much, much higher rate. Now those bonuses are taxed also as ordinary income, so it's worth considering, but that can be really compelling. There are also other bonuses. There are new customer promo rates. We're going to increase the interest rate by 1% for 90 days, which I think is something Marcus does if you have a referral. So when I think about bonuses, I think about all these things. I think about accounts where what you're going to earn, whether it's in the form of cash or a percentage, is going to be increased for some period of time and then go back to something steady. So whether that's a teaser rate or not, those things are all important to consider. And unfortunately one of the challenges with all of these bonuses is that some of the best ones, they just aren't around anymore. So there were some crazy bonuses where Robinhood was giving a 1 or a 2% match or even up much higher on retirement accounts. We bull was doing similar things where you were getting 1% matches on brokerage accounts. It's a public had one. Best I can tell, there are not any as of recording this on July 12, there are not any of those bonuses that I could find active right now on non Retirement accounts. If those come back, they could really change this landscape. But for now, almost all these bonuses I'm looking at are cash bonuses based on usually a tranche of where your money is, or smaller cash bonuses that are kind of for any amount but require certain activity, maybe a direct deposit or something like that. And the way I'm going to think about this is not going to be framed in terms of the bonus relative to the amount. For example, if you're going to get a $500 bonus on depositing $500, the APY equivalent of that is insane. But if you're trying to invest a hundred thousand dollars, it barely moves the needle. And so when I built this model out, it factors in how much cash you have to deploy when it considers what the APY of some of these bonuses are, because it just wouldn't be fair otherwise. Like, it wouldn't be fair to call something a 700% APY because of what it earns, if it only earns that on 500. Because I'm guessing that most people are not trying to move a chunk of cash to save it for the future when it's just $500. So most of them end up being somewhere around 1%. I have not found a lot of bonuses at scale that really exceed that unless you start to stack them. If you're going after, well, Citi's gonna offer me two thousand dollars if I deposit a hundred thousand dollars for ninety

[Co-host or Guest]

days, and then after ninety days I'm

[Chris Hutchins]

gonna move it to another one and move it to another one and move it to another one. In those sequences, you can often increase the return you're getting by 2 or 3%. So I'm not saying you shouldn't do that. I'm just saying you should think about how much effort that will be. On the investment side, it's often not as much effort as it seems because you can keep that money invested in whatever it is and then just use the ACAT system, which lets you transfer your investment holdings from institution to institution. If those are bank bonuses, then it's also easy. You could just wire the money to the next institution as well. That's something to consider as you're thinking about all these options, is how much do you want to include those bonuses? For me, I found that I'm not. But the assumption I'm going to make when I calculate everything as we run through this comparison is that all of those brokerage accounts that you could be taking advantage of bonuses at or earning other promos at, you're just going to be invested in a Treasury ETF like VBill or SGov. So I'm going to view that number as the combination of those two returns. And then the last thing it is, at the very, very high level, we're talking millions of dollars. Some of these brokerage bonuses are negotiable. I haven't been in this situation myself, but I have seen posts online where reach out to a Schwab rep and say, hey, I'm thinking of moving 5 million, 10 million, $20 million over to Schwab. What can you offer? And especially when Robinhood was offering these really big bonuses, they were willing to compete. Especially for people who are looking to leave, they were willing to compete, retain funds as well. And so that's definitely something to consider as you're thinking about what to do if you're at that level. But it's also worth considering what kind of account you have and whether some of these options support it. Because at a certain level of assets, I think it's worth considering in certain states whether you want to set your account up as a revocable trust account versus a joint account versus a single account. This isn't the episode about trusts and estate planning.

[Co-host or Guest]

That episode was episode 62. But at a certain level of assets, especially in states where probate kicks in,

[Chris Hutchins]

if you die, your assets can go

[Co-host or Guest]

through this process where a judge has

[Chris Hutchins]

to kind of sign off on everything that's happening. And if you have your accounts titled in a revocable trust, which is not some fancy thing that you have to

[Co-host or Guest]

wire money in and it's stuck there

[Chris Hutchins]

forever, there are lots of fancy kind

[Co-host or Guest]

of tax avoidance trusts.

[Chris Hutchins]

A revocable living trust is not that this is much more about, you know, having say on where your money goes than it is about locking things up and earning special tax treatment. In fact, it's taxed the same as money in your own name. But certain companies like Robinhood don't support trust accounts. So if that's important to you, then some of these options are just not going to be options for you when you set up your accounts.

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Okay.

[Co-host or Guest]

There's actually one other thing that I didn't mention is there's a new brokerage firm that I've tested out.

[Chris Hutchins]

Personally, I am not an investor.

[Co-host or Guest]

I have no equity in this company called Silo Markets, and they allow you

[Chris Hutchins]

to earn points on your brokerage account.

[Co-host or Guest]

And at first I was a little skeptical, except that the entire platform is

[Chris Hutchins]

built on top of Interactive Brokers, which is a very, very reputable brokerage account.

[Co-host or Guest]

So I actually have no fear that your money is in some sort of strange account.

[Chris Hutchins]

In fact, it's so built on top of Interactive Brokers that you actually have an Interactive Brokers account. And so were something to happen to Silo, which I believe they just recently

[Co-host or Guest]

raised some money, so I'm not convinced

[Chris Hutchins]

it'll happen anytime soon.

[Co-host or Guest]

But were something to happen to Silo,

[Chris Hutchins]

you would just have an Interactive Brokers account that you could transfer to maintain directly with them. So I am not worried about having funds at Silo.

[Co-host or Guest]

What I am excited about is what

[Chris Hutchins]

they are offering, which is you can basically earn points on your brokerage balances. They also have some credits you can earn. I'll talk about those. And they have a huge welcome offer. It's effectively a brokerage bonus that at least is good through the end of the month of July. So let me walk through this. So first off, you earn half a point on your balance of your brokerage account per dollar. So if you have $100,000, you can earn 50,000 points. Now, they have two tiers of plans

[Co-host or Guest]

that you can be in to earn

[Chris Hutchins]

these points and they do come with a fee. So on the gold tier, you can earn points up to $100,000. Balance, you pay $240. So you're earning 50,000 points at the high end, which you can just cash out at $500. There's no challenge. However, by the time this comes out or shortly after, they will likely have at least, they've told me, transfer partners, where you can actually transfer these points to airlines and hotel groups and that kind of stuff. So you can be earning points. Now, technically you're paying for those points if you're not cashing them out. But even if you cashed out some of them to offset the annual fee, you'd still come out ahead. So if you had $100,000 here, you would earn $500 a year. The annual fee would be $240.

[Co-host or Guest]

Let's say you cashed out 24,000 of

[Chris Hutchins]

those points, got your $240, paid off the annual fee, then you could keep the other 26,000 points to yourself.

[Co-host or Guest]

Now, I don't know what the 1099 value of these points will be.

[Chris Hutchins]

They will likely have to issue 1099.

[Co-host or Guest]

So I should caveat that if you earn 50,000 points, depending on your tax

[Chris Hutchins]

bracket, depending on whether you can offset the annual fee, I'm not a CPA.

[Co-host or Guest]

50,000 points might allow you to cash

[Chris Hutchins]

out $500, but that $500 might not be the full 500 after you factor in taxes. That said, I think it's unlikely that you would maybe lose money on this deal, but it might not be as lucrative based on taxes. But when you factor in the welcome offer and when you factor in some of the credits they're offering, it becomes even more interesting. And so on the platinum level, you can have a $500,000 balance earning point

[Co-host or Guest]

5x points, which means if you had $500,000, you'd earn 250,000 points a year.

[Chris Hutchins]

Now, you could cash that out at $2,500. You could see where the platinum tier

[Co-host or Guest]

makes even more sense because you could

[Chris Hutchins]

earn $2,500 a year on your half a million dollar brokerage account and you're

[Co-host or Guest]

paying a $960 annual fee. So I can't think of a tax

[Chris Hutchins]

bracket where that math doesn't work out in your favor.

[Co-host or Guest]

And so that seems like a great option.

[Chris Hutchins]

And then on top of that, if you put an amount above the threshold where they cut off points earning, they offer these kind of credits towards different things. So let's say you put a million dollars in, they're going to credit you for your Costco executive membership of up to $130 a year. They're going to credit you on an Amex Gold annual fee up to $325 a year and an Amex Platinum up to 895 a year. Now, the interesting thing about credits is that those are reimbursements, so those are not going to be taxable income. So that first $500,000 in silo platinum

[Co-host or Guest]

is going to earn you 250,000 points. The next $500,000 isn't going to earn you that.

[Chris Hutchins]

You could cash out at $2,500, but it is going to earn you 13 $50 of reimbursements that you won't have to pay taxes on.

[Co-host or Guest]

Now, in California, would you rather have $2,500 taxed at 54% if you're at

[Chris Hutchins]

the highest tax bracket, or would you rather have thirteen hundred and fifty dollars? It's not taxed.

[Co-host or Guest]

So I kind of look at this and say on an after tax basis,

[Chris Hutchins]

it's probably a quarter of a percent boost, 0.25%. But relative to the after tax earning in most of these accounts, which is somewhere around two and a half percent, that's a 10% bo, and that's at

[Co-host or Guest]

the highest tax bracket, lower tax brackets,

[Chris Hutchins]

it's going to be better. And if you factor in the welcome offer, it's Even better.

[Co-host or Guest]

So right now they're offering a welcome offer of 100,000 points for the gold tier, which means if you transfer in $100,000 to their brokerage, you're going to get 100,000 points. If you transfer in 500,000 points on

[Chris Hutchins]

Platinum, you're going to get 250,000 points. So they're basically offering $1,000 for $100,000.

[Co-host or Guest]

So a 1% bonus or 250,000 points,

[Chris Hutchins]

which is $2,500 on a $500,000 balance, which is a half a percent boost.

[Co-host or Guest]

So somewhere between half a percent and

[Chris Hutchins]

a percent boost on the welcome offer

[Co-host or Guest]

after tax, that's probably another 0.25 to half a percent.

[Chris Hutchins]

Plus the points you're already going to

[Co-host or Guest]

get on top of that, plus any

[Chris Hutchins]

of the reimbursement credits you're going to get. If you layer all of that in, it's probably for your first year, somewhere around a half a percent boost.

[Co-host or Guest]

Now, obviously that depends on which tier

[Chris Hutchins]

and how many assets you have and whatnot.

[Co-host or Guest]

The holding period for the bonus is that I think it's earned on the

[Chris Hutchins]

10th month, so it's almost a full year.

[Co-host or Guest]

But I think what they've seen is that if you put in enough money to get the bonus, you're putting in enough money to get the ongoing points. And that just is a great deal for all. So the bonus they have going on

[Chris Hutchins]

right now is not public. You need a referral link to get access to the welcome bonus.

[Co-host or Guest]

I'll put mine at all thehacks.com/silo. Silo you can find in the show Notes, Full disclosure.

[Chris Hutchins]

That's my referral link. I'll earn some points, but they've told

[Co-host or Guest]

me there is no public facing brokerage bonus.

[Chris Hutchins]

And so the only way to get that brokerage bonus of 100 to 250,000

[Co-host or Guest]

points, which is effectively 1,000 to $2,500,

[Chris Hutchins]

is to use a referral link.

[Co-host or Guest]

Again, no affiliation with the company other

[Chris Hutchins]

than that is my referral link and I do use it right. Like I am currently earning points on my brokerage. I transferred in a large amount of

[Co-host or Guest]

all of my other broken investable assets to Silo because I wanted to earn points. And best I can tell from doing

[Chris Hutchins]

my research, there's not really a downside

[Co-host or Guest]

because I feel safe that my money's at Interactive Brokers.

[Chris Hutchins]

I might as well also earn points on my investments.

[Co-host or Guest]

So I've been a big fan of Silo. We'll see how this model works. As a business, I don't know, but because it's interactive brokers, I'm not worried and I'm excited that I'll be able to actually transfer out some of these points to airlines and hotels in the future. I have not cashed my points out yet. Okay, so now let's actually look at the options. And this is the third time I'm rerecording this section because at first I was trying to read through all of them and I realized throwing out dozens and dozens of numbers on a podcast is really confusing. So I'm trying to simplify this and if you want to go deeper, just

[Chris Hutchins]

go to the tool.

[Co-host or Guest]

I'll put a link in the show notes. You can play around with it. That means on YouTube go to the description box. That means on the podcast you can click down into the description or you can just go to allthehacks.com and find the episode page, which if you scroll down, you'll see it and you can find that. So any of those options you can go play with this tool. And here's what you'll see. You'll see a bunch of options for what is your tax bracket? How much cash are you deploying? There's an option for splits, which is like if you have a lot of money, maybe you're willing to put it into four different banks to get bonuses. You'll see a horizon for how long the money sits. Because if you're trying to invest this money for five years, the impact of a bonus that's going to pay you for 33 months hold is not really that high. You'll be able to filter for different kinds. So do you just want to see places you can park money? And you don't want to think about promo rates and bank bonuses and brokerage bonuses. Do you want to just search for things? And then how do you think about liquidity? Do you not want a brokerage account because you don't want to have to sell an etf, let it settle for a day or two and transfer that money. And so that's something you have to factor. And then this fun one which is like, how much do you value American Airlines miles? Because that can have a huge impact on whether the Basque mileage savings account is interesting. And then a lot of other checkboxes about things that might be relevant to you or not, including a bunch of historical offers that I'm including just so you can get a sense of how they compared to what we have now. This episode is brought to you by

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[Chris Hutchins]

Mercury really makes my life easier and doesn't waste my time.

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[Chris Hutchins]

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for being here today. You can find all the links, promo

[Chris Hutchins]

codes and discounts from all our [e-mail] deals.

[Co-host or Guest]

They're all brands I love and use, so please consider supporting those who support us. So here's my takeaway. Without going into all the nuance and all the detail of everything, if you look at all the options, what kind of APYS can you get for things at the highest level and kind of what's that spectrum? Now I will say for almost every option, the best account is this new X Money account, X being formerly Twitter and it's not available to the public yet. But the current announcement says that you get 6% APY on all your cash and I think they have 40 sweet banks up to $10 million of FDIC coverage, which basically means this is unsustainable. No one else offers that. So I don't know how this is going to be possible. So I guess if you're in that early access group, great. That's what you should do at every single part of this spectrum. If you're not in that group, then ignore it because I assume I could be wrong that by the time it comes out there's no way they're going to keep offering that rate. There's no underlying thing you could do with your money that would make that possible. So what are the options actually say? Well the base rate for I'm going to compare things to is on the high yield Savings side, that is about 4%, right? And I'll say three and a half to 4%, because at a certain point you might decide, yes, I could go to one of these new FinTechs and get 4.2%, but I really rather just be in something that's offered a high rate for a really long time and not have to worry about anything else. And so that's something like Betterment Wealthfront Mercury, where you can earn probably 3.25

[Chris Hutchins]

up to three and a half percent.

[Co-host or Guest]

And so that's kind of one area all the way up to 4%. On the high end, what that is after taxes really matters on your tax bracket. If you take the Wealthfront cash account at 3.55% and you have no state income taxes and you're in a really low federal bracket, then that's 3.12%. If you're in the highest state tax and the highest federal tax bracket, that Wealthfront cash account at 3.55 is now looking like 1.63%. And so at those high brackets is when looking at the treasury options starts to really look a lot different because on face, the return for Escov or Vbill is somewhere around the 3.7% mark, which is slightly higher than the 3.55% mark. But it's not so much higher that I'd probably want to have the hassle of having to move my money into a brokerage account. Because if you want to access that money, you have to sell those brokerage positions. Usually it takes a couple of days and then you transfer the money out. That little add to liquidity for 0.1.2%

[Sponsor/Ad Reader]

is probably not worth it for me,

[Co-host or Guest]

it might be worth it for you. It might be enough money that you don't need for years that it doesn't matter. But if you're at the highest tax brackets on both, and now you're looking at, well, S. Gov is at 3.66%, but on an after tax basis that's 2.17%. While something like Wealthfront's at 3.55, but on an after tax basis it's 1.63. Well, difference between 1.6 ish and 2.2 ish is really meaningful. So if you're at a high tax bracket, looking at the treasury options on the brokerage side is the answer. And so what you're going to look for at that level is what kind of brokerage bonuses can I stack on top of those brokerage options to get the best return? If you're at a lower tax bracket. The bank bonus side can be really compelling because those high yield savings rates are also competitive because you don't mind as much the tax treatment. At the really high level we're talking,

[Chris Hutchins]

you know, you've got $1 million to

[Co-host or Guest]

invest, and you're probably at that case at a higher tax bracket. There are still brokerage bonus options that matter, but you're almost always going to be looking at investing in some sort of brokerage option instead of a high yield savings option, which is not something I always thought through. I personally have kept at times large amounts of money in a high yield savings account, not really factoring in the state tax benefit. And probably because I didn't put the numbers on the table, I was like, you know, they're both three and a half. Like, it's just state taxes, it's just, you know, 10 to 13%. But it actually matters if you have a lot of cash. For me, I use Mercury not just because they're a sponsor. I've been using them for years. And their savings account was at 3.25%, or at least it is right now. And I remember thinking, okay, well, I'm going to have to pay the irs. I don't want to make this complicated. Is it really worth moving the money somewhere else? And this is a good example of where trying to optimize too much can end you up in something that's suboptimal because there's so much friction. So this is a personal story, but, you know, I was thinking I'm at 3.25%, which, you know, at the highest tax bracket, because this tool doesn't have my tax bracket, only has the highest tax bracket, you're at 1.49% return. But if you were to put that in something like Escov, you know, you would be at 2.17%. So in my mind it's like, oh, I should do that. But I never did it because the friction of open up the brokerage account, transfer the money, invest the thing, it just was a lot. And I was laughing because Mercury offers this personal investment account that's linked to your bank account so you can manage it all in one place. And it's so easy. And they charge 0.1% as a fee for that account. And in my mind, I'll be honest, I was like, all I was going to do was invest in Escov. That was it. And so the idea of paying 10 basis points to invest in Escov was crazy. So I Didn't do it. However, I also didn't go through the friction of wiring the money to a brokerage account and buying this thing like that just felt like too much. And so now the thing that I realized is that sometimes you let trying to get the best deal or avoid the fee get in the way of doing the thing. That's simple. And that 10 basis point fee, which, yes, of course, I wish it went away, but that 10 basis point fee is the fee to have a bank account connected to a brokerage account that makes it so seamless to be able to invest that money. And so that is what I've ultimately realized when it came to this, is that the easiest thing is to move your money, because I'm going to need that money to pay the IRS soon. It's so easy. If it's all in the same place, I'm willing to accept that fee. However, when you factor in these bank and brokerage bonuses, you'll start to see that the best options are always what offers the biggest bonus right now. And so the best option, if you have a lot of cash to invest, is hands down, opening up a Silo account. Right, Right here, I'm looking at this. And if you're willing to move money into a Silo Platinum account with the brokerage bonus, with the reimbursement of those Amex Costco fees, if you have them already, the return on that account is an extra 0.2.3%, which, if you have a lot of cash, really matters. And so I would encourage you to consider a lot of these bonus options as ways to increase what's going on. So just to give you a couple of more examples, eTrade has a brokerage bonus right now. You transfer in a thousand, they'll give you $50. You transfer 100,000, they'll give you $600. You transfer in over $5 million, they'll give you $10,000. So, you know, at the high end, that works out to, you know, a point 2% bonus. There's usually a sweet spot somewhere where the bonus is kind of somewhere in the 0.5 to 1% range. So I think on ETrade it goes above that at 20,000, but if you get up to 200,000, it's down to half a percent and kind of scales from there. Some of the more compelling options to consider right now with a lot of cash, Wells Fargo has a bonus that's $3,500 on 500,000. That's the Premier account. Again, I look at Doctor of Credit for all this data, and I look at what are the best brokerage bonuses. So right now, if I didn't already have a silo account, that would probably be where I parked cash. Opening up one of these Wells Fargo Premier accounts seems like another really great option for parking cash for a period of time, especially because it's three months. And so if you. If I have to pay the IRS three months, that's an option on the lower end, if you scale down, there are so many bonuses in the hundred to $400 range. If you're only looking to deposit, you know, $10,000 and you can sequence them, you could just put $10,000 in one and six months later, or five months later, whatever the holding period is, transferred to the next one, transfer to the next one. I will say that there is a system called checks. It's kind of like your credit report, but it's focused more on bank and credit union account opening. At a certain point, if you're constantly opening up a lot, a lot, a lot of banks, you might find that certain institutions aren't going to let you open up another checking account. You know, this isn't going to happen if you open one or two a year. But I just flagged that at a certain point, if you had, let's say, $1 million, and you thought, here's what I'm going to do. I'm going to open up every single bank and brokerage bonus. And there's this thing on here called like, set and forget versus cycling, where it kind of like goes to the aggressive version of, like, if you're willing to do everything, it's like, well, you could put all of your money in a bunch of different tranches and then cycle it from institution to institution to institution, and the end total will be, you know, an extra 0.2%. So right now, I just did it for a million dollars, four splits, do all the cycling, and it was like, you will make an extra $2,000. And so you could go through that level of work just. For me, I'm not sure it's worth it, but it's definitely something worth considering. No, it's not, but it's definitely something you could consider if you want to. For me, I found that, you know, one or two brokerage bonuses a year is about all I can handle before the overhead becomes so much that I'm not doing it. And I've learned that about myself. And so it's one or two a year max. Now, I haven't mentioned that Basque mileage account yet, but I will flag that. If you value American airlines miles at 1 and a half cents or more and you are at a high tax bracket, that bask mileage account can be among the highest returning. The only thing that beats it in my math here is the Silo accounts. If you have those credits to get reimbursed, like if you actually have the credit cards that Silo is going to reimburse you for, that ends up being the best account. And this, by the way, is not factor factoring in bonuses at all. But absent that, the bask mileage savings account is right after it. So let me summarize to kind of simplify this for everyone, because I know I just threw out a ton of numbers. If you're not in a high tax bracket, parking your money in cash and savings at a high yield savings account can be pretty competitive. As your tax bracket goes up, parking your money in a brokerage account becomes much more interesting because you can put it into treasury bills or ETFs or money market funds and you can avoid needing to pay state taxes on that interest. So the higher the tax bracket, the more the brokerage side makes more sense over the high yield savings side. However, the bonus side on both bank bonuses and brokerage bonuses can really, really come into play here. I think the brokerage bonuses are more interesting on the higher tax side as well and on the higher asset side because a lot of the bank bonuses are just not focused as much on higher numbers of dollars. When it comes to brokerage bonuses, it looks like right now the two biggest ones that are probably going to be your best options are the Wells Fargo Premier and the Silo brokerage bonuses. The Wells Fargo one's just a public one. The Silo one again, you can go to allthehacks.com silo silo, and that's my referral link. Or you can use someone else's and that's probably going to be your best option, at least as of recording this. There are other ones from Trade up, from Betterment, from JP Morgan, from Merrill. You know you're going to have to go to that doctor of Credit post to see what the best ones are. I'll link to that in the show notes. I don't think the Silo one's on there because it's not a public one. So that's something to consider. And then I will just say if you are not as much focused on trying to make this complicated and you just want where can I earn high interest and operate out of an account? If you go back and listen to the episode. Two years ago I think my takeaway was Fidelity Wealthfront and Mercury. Wealthfront's added a couple features related to sending wires that I think has made it better. Fidelity has lost the cash management functionality for having a core position in a fund that has the state tax treatment. So for me that's a huge knock and kind of disqualifies it for me. And then Mercury's personal accounts have added this invest feature which make it really easy to go from an account you can spend out of which my Mercury Savings account is my primary account, right? I can spend out of it. I can pay credit card bills out of it. I could do everything out of it while earning, you know, over 3% APY, which based on California taxes is not the best option. But it is the best option for me for spending and that's not even factoring in. It has all the features I want. I don't know which date this come out so I don't know if there is a Mercury ad in this episode, but I've used Mercury Personal as my primary account and if you have a business account with Mercury you don't even have to pay the annual fee for the Mercury Personal account. So for me the setup is Mercury Personal for cash because I value a lot of the features they have like free wires, spinning up multiple accounts and kind of managing your personal finances like you would manage a business and having that great user experience. But the Wealthfront Cash account would be my backup if that weren't what I was using. And then using a investment option for investing in something like SGOV and ideally somewhere where you can get a really big bonus or an ongoing bonus of earning points so that, you know, kind of boost that beyond the alternatives. So hopefully this is helpful to everyone listening. I'm going to do another AMA on a few topics like this in the future, so if there are questions and follow ups go to allthehacks.com ama for Ask Me anything. I'd love to help answer them. I realize there's a lot here, so definitely go. Feel free to play with this tool. Go to the doctor of Credit links. All the links for this will be on the show Notes. They'll be on the website. That is it for this week. Thank you so much for listening. Also, don't be surprised if you don't see an episode next week.

[Chris Hutchins]

I am finally going to take a

[Co-host or Guest]

week off and not put an episode out.

[Chris Hutchins]

But don't worry, there will be another

[Co-host or Guest]

episode the week after and I will see you then.

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