Ira or Savings..newbie saver

[1prettyorchid]

I'm new to saving world.. specifically because I want to buy a home. Im projected to have around 15k saved by 12/31. 

I currently have 4k in my savings and $250 in an Ira. I also have another savings with $1000 (for emergencies). 

I'm making very little money in my money market savings (.40%). Would an ira be better since I don't plan on touching the money? I am willing to invest through Fidelity. Or should I play it safe? Please provide some insight..

[iced]

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@1prettyorchid wrote:

I'm new to saving world.. specifically because I want to buy a home. Im projected to have around 15k saved by 12/31. 

I currently have 4k in my savings and $250 in an Ira. I also have another savings with $1000 (for emergencies). 

I'm making very little money in my money market savings (.40%). Would an ira be better since I don't plan on touching the money? I am willing to invest through Fidelity. Or should I play it safe? Please provide some insight..

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An IRA is for retirement savings, so it's not suited to saving for the purpose of buying a home in a few years. Now, if you don't want to touch that money for a couple of decades, then yes an IRA could make sense.

Otherwise, you probably want a taxable brokerage account to invest money in. There's no minimum to when you can sell/withdraw and you have the same (or more) investment options than you do with an IRA. For a timeframe of a few years, investing still beats out keeping it in savings or a CD ladder, but you will want to play a bit conservative with your investments to minimize your losses in such a short timeframe.

Fidelity offers both.

[DONZI]

@1prettyorchid-- the amounts you mention are perfect for some of the high APY checking/saving accounts available at online banks/credit unions.

Some of the best rates IIRC have caps on the deposit amount for the >1.00% but other have no or other stipulations which may be reasonable to you.

An IRA is a great plan for retirement but it's the content of it that makes the money. If you see your IRA growing well with it's holding(s) maybe it's worth considering those investments in a taxable brokerage account..

The markets and economic outlook is kind of spooky right now and your wanting to grow ~$5250 from now until 12/31(?) -- with no chance for loss I assume.

Maybe look over secure alternatives like https://www.thebalance.com/best-high-interest-checking-accounts-4164760 and/or just research with your search engine of choice keywords like "highest interest rates accounts" etc.

Despite the great history of index ETF/Mutual funds like VTI, they too could be dipping at the time you wish to utilize the invested cash.

[longtimelurker]

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@DONZI wrote:

@1prettyorchid-- the amounts you mention are perfect for some of the high APY checking/saving accounts available at online banks/credit unions.

Some of the best rates IIRC have caps on the deposit amount for the >1.00% but other have no or other stipulations which may be reasonable to you.

An IRA is a great plan for retirement but it's the content of it that makes the money. If you see your IRA growing well with it's holding(s) maybe it's worth considering those investments in a taxable brokerage account..

The markets and economic outlook is kind of spooky right now and your wanting to grow ~$5250 from now until 12/31(?) -- with no chance for loss I assume.

Maybe look over secure alternatives like https://www.thebalance.com/best-high-interest-checking-accounts-4164760 and/or just research with your search engine of choice keywords like "highest interest rates accounts" etc.

Despite the great history of index ETF/Mutual funds like VTI, they too could be dipping at the time you wish to utilize the invested cash.

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Yes, if you are talking about under $20K, I would certainly consider the ETFCU (Evansville Teachers) that is included on the link provided above.   They give 3.3% on a balance of up to $20000, with some fairly easy to meet requirements (15 debits which can be 50c amazon reloads and 1 ACH in of any amount).   This is a good interest rate for a no-risk account (of course, the APR could change but it's been stable for a long time)