Hi - I have about $100K sitting in a money market that I should probably do something smarter with.

I fly fairly regularly to visit my girlfriend. I use AA miles for these trips sometimes, the rest of the time the tickets cost ~$300-500. So the standard value of about $0.02/mile holds true for me.

I have an AA visa that I got with a 50K promotion (no 75K - this was before I found FT). I use it fairly regularly and put maybe $1K or so/month on it. I don't travel much for work (they keep on promising me that I'll fly to far off exotic places... and yet they haven't sent me anywhere yet...)

I already have some money with Vanguard (Roth IRA + other investments) and I want to keep a chunk of change in my checking. But that leaves me with about $100K I can play with. I'm thinking about putting it in a Fidelity account, but I'm not sure if this is a good idea or not.

Ideas?

In this low rate environment, many people have chosen to open checking accounts with BankDirect. It pays a nominal amount of interest (0.05%?) but the kicker is that it also gives you 1 AA mile per month for every $10 you have in the account. With $100k, you would earn 10k miles per month. Over 5 months, that would equate to 2 RT domestic tickets. There are also various bonuses for direct deposit, debit card transactions, etc. If you have someone refer you, you get an additional 1k AA miles and so does the person who refers you.

If you would be interested in being referred, I would be happy to do so.

Spend it and stimulate the economy







I didnt mean to put the thumbs down... But I don't know how to remove it either!

If you run out of ideas, I will be open to helping you spend it
I also, fly to see my GF. I assume you live in the same country as yours, for me it's about $1300 to get across the pond:P

Open a Bank Direct account first and then keep on transferring the money from there to a Fidelity account.

There are many checking accounts that yield about 3% on the first 25K. So you can leave 25 in such an account and play with Bank Direct and Fidelity with the rest.

Let me know if need Bank Direct referral

Who is paying 3% on an insured account? Thanks.

The Fidelity bonus can be gamed by moving small deposits into and small withdrawals out of your new brokerage account. If this is the approach you want to take, kyunbit's advice may make sense.

However, if you want the least amount of hassle, make a large enough deposit at Fidelity to earn your sign-up bonus, wait for the miles to post, and move most of your money into BankDirect afterwards. Most of the AA miles earned at BankDirect are based on your average balance held at BankDirect. That means you want a large balance to sit there over time in order to maximize your miles. Every time you move money out of BankDirect and into Fidelity, you are negatively impacting your BankDirect earnings for the month. The only risk you take with this latter approach is Fidelity somehow taking back your miles because you didn't leave your initial deposit with them, but I don't believe I've heard of anyone reporting this in the past.

Pioneer Credit Union pays me 2.99% on insured checking account.. So I'm guessing other Credit Unions do also.

There are many FDIC places to do this. See
http://www.money-rates.com/rewardschecking.htm

However you do have to make sure you get the required monthly debit transactions, ACH charges, which I have automated to ping $1 between credit unions, and on some of the accounts, on-line only account communication. One of my banks has a max of two of these accounts per person, so Mrs. Outoftown and I each have two accounts and 1 is in my mom's name. They had a "pudding guy" open 170 accounts, so now there is a cap on the number of accounts. Another credit union checking account I have pays 1% less, but no ACH charges are required and their cap is $50k instead of the usual $25k. Also the rate has been dropping over the past two years. Mine just dropped to 3.01% last month.

HTH,

outoftown

Hi,

At the risk of sounding like a economics geek (I am), June 30th is right around the corner. If you don't know why this date is significant, you might need some financial guidance. On this day (or close to it), the Federal Reserve "Fed" will end its QE2. That stands for Quantitative Easing #2. For a while, the Fed has been purchasing 70% of all of the new bonds issued by the treasury (in essence, printing money). As of the end of June, they will have to announce QE3 or find someone to buy all of the bonds that the government needs to issue to pay for its deficit spending. With the Chinese being net sellers recently ($600 million) and Japan in no position to buy more US Debt with the tragedy there, this could be a domino of bad things to come. If they announce QE3, it will be a signal to the world financial markets that the US is going to use inflation to pay for all of our debts (with cheaper dollars)...a domino of bad things to come.

So as the saying goes, keep your powder dry...you may need it for a good investing opportunity or for other reasons.

I don't mean this to be a political point, only an economic point. Feel free to PM me with those thoughts.

Alex

This recent thread may also give you some ideas:

http://www.flyertalk.com/forum/miles...pile-cash.html

This always puzzles me:
If you have 15K in cash that you're parking long term, why isn't some of that offsetting your loan balance?

Are you from Nigeria and do I need to provide my bank routing information?

The loan balance that one bank requires would be a deal-killer. Anyone with outstanding debt at a higher rate than the high-yield rewards account would be better off paying down the debt. Also the number of "hoops" you have to do for earning the higher interest for an account that is capped at $10k or $15k is too much for too little. The bank I'm using has my 4 accounts with $25k cap each, 10 debits per month per account, no loan, e-mail statements and 1 ACH charge monthly per account. There may be a better choice, but I can walk to this bank and I like the employees, who are fans of FT.

-outoftown

there will be no QE3. mark this post.