High interest savings account (online)

GTPpower

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I have about $1000 that I keep in a local bank savings account. I've had it there for about 5 years, and I just let it sit. It maybe makes thirty or forty cents a year.

This is not money I will most likely ever spend, I just leave it sit just in case.

Has anyone used some of the higher interest online savings accounts? At 2% interest, it's not making much, but I would at least feel better. Are these accounts worth the hassle? Or is there something else I should do with it besides a mutual fund?
 

GTPpower

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I was actually just reading that link right before I posted this.
 

Rebel

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I've had an AMEX savings account the past few years. It's on the list, and I think it's gotten me some extra perks with them as well regarding my amex card.
 

Kensington

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Was just going to say, I’ve got an Alliant savings account and they seem to be always raising the interest rate. But just saw it’s on the list, but it’s a great bank, great CC’s, and great rates on auto loans. I’ve been with them for awhile
 

sickmint79

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I have about $1000 that I keep in a local bank savings account. I've had it there for about 5 years, and I just let it sit. It maybe makes thirty or forty cents a year.

This is not money I will most likely ever spend, I just leave it sit just in case.

Has anyone used some of the higher interest online savings accounts? At 2% interest, it's not making much, but I would at least feel better. Are these accounts worth the hassle? Or is there something else I should do with it besides a mutual fund?
so if it's money you want to invest i'm not sure how young you are or what else you are doing, but my first recommendation would be a roth ira and putting all 1000 into SPY then turning on dividend reinvestment (DRIP) then just leave it alone for 40 years.

if you want something more liquid then may high yield checking but note that doesn't appear to be all that high yield now and usually has little monthly hoops (little over 2%)

CDs are a good option for more safe interest; you just can't take the money out until completion which still seems fine for you. this is 2.7-3%.

i wrote a bot to invest in lending club, i would suggest just doing an auto-invest thing there. basically you are investing in consumer debt. realistically you can expect 3-7%, although you control the risk and that means you could still lose money or you could earn 10%. i think if i refer you and you put in 1000 that we'd actually both get $50 and you'd be up a good chunk.

basically you invest in loans and spread your risk by investing in multiple different ones. ie. you put $25 into someone's A grade home improvement loan and $25 into someone's higher interest but higher risk B grade debt consolidation loan. ideally you spread the risk among 100 loans ($2500).

i could help set up a simple conservative account there for you (mostly A-C loans) and you could expect to beat a CD as a result. similar to a CD though it's not super liquid; the loans are 36 and 60 month loans. although there is a secondary market, so if you wanted to sell a loan for cash, you could.
 

IDAFC21

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Im using capital one 360 for my main savings right now. Used to be ING but then capital one bought them out. They used to have great rates but now mine is like 1%. Which isnt horrible for a strictly savings account, but I may have to look into some of these ones that are offering 2%....
 

VenomousDSG

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The best savings accounts dont even cover yearly inflation rates.

Unless you're investing your money, you're still losing money in the longrun.
 

sickmint79

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a fairly conservative lendingclub mix with 36 month loans and estimated return:

 

Knowklew

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a fairly conservative lendingclub mix with 36 month loans and estimated return:

I've been averaging about 7% with Lending club however I am at a higher risk profile.
 

Bruce Jibboo

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:eek:bama: ... curious on this bot you wrote [MENTION=341]sickmint79[/MENTION] might need its own thread..
 

sickmint79

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:eek:bama: ... curious on this bot you wrote [MENTION=341]sickmint79[/MENTION] might need its own thread..
well i have found some difficulty in that my estimate is 1200 loans are released daily, and my bot only appears to have availability to like 50. and he is a picky boi so that means it takes forever for me to find something to buy. the problem is that institutional investors get access to loans... whenever the fuck they do, and after that, investors who have auto-invest on take a bunch of them. then whatever is left over eeks out to both the website and the api at the same time for individual ones to be chosen at that point by normies who are not auto-investing. it's only been the last week i've been monitoring this (probably lowest time of the year) but if i want the juicy 1 out of 1000, looking at only 20 new ones a day takes forever.

there is a similar situation at prosper where i am also writing a bot, although, at least at first glance, it seems like it might find more it likes. well probably too soon to tell.

back at LC though, you can buy notes on a secondary market - and this is where a bunch of loans *are* actually listed. usually 100k or more. these are mostly loans that have already been made, with pay history, and people are selling them to liquidate their account for cash or they may think they are going to be distressed, etc etc.

although, the problem is that that doesn't scale. ie. with the normal loans on the website, if i find something juicy, i can put my $25 in and i can also put your $25 in, because the whole loan is for 10k. that is not the case on the secondary market, because someone is selling the remaining $15 of their original $25 for $13.50. so if i buy it... you can't, there's not another one.

so unfortunately, original bot could scale to invest in millions of dollars and for many people if it had access and money. it still runs... it just hasn't bought a single loan after a week of being turned on so far.

new bot works, but it can only scale out to how "loose" i make the buying criteria and how much money it wants to eat. i don't have a good estimate of how hungry it is based on it's current picky eating level but i think $10-$25 a day, i certainly can't scale it out to a huge amount. i expect it to give me a good % return but not necessarily on a crazy large pile of money.
 

sickmint79

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here is one my dev environment just found, and it's been up since yesterday... i'm not buying it because i already have another share in this loan. C grade loan and here is the original listing.

my algo is pretty conservative and rates this as 90.112% buy.



note the real chance of the loan fully being paid off is higher because my algo is super conservative. anything at 0.9 i tell it to automatically buy. dev spits out my human usable link, so if you are on lending club and log in, and turn on the secondary market, this link will take you to a search which should show this loan: searchy

my bot is predicting it will get paid back, and the return is at 17.38% for the remainder of the note. bonus, the credit score has gone up since the original listing (my bot takes current fico score and original listing (all elements) into account - although fico directly itself matters less than you might think)



[MENTION=11595]Knowklew[/MENTION] you should actually go buy this. it could still go south, of course, but it is looking good enough to the point where i should ignore the diversification and just go for it myself. unlike the political thread with flyn level statistical analysis, you would actually have a legitimate gripe about my ability to understand and model data if this one fails too! although i would ask to be judged on 100 picks not just 1!
 

Knowklew

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I cant find that loan when i do a search...
 

sickmint79

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I cant find that loan when i do a search...
note that it is a secondary market note - not a new loan - it's a loan someone is selling with 24 remaining payments (of an original 60)

invest -> trading account -> go to the note trading platform

from here you can try to manually find it (a pain, since you can't search by loan or note id) - or use the filters, or you my link above (searchy) - click or copy and paste it and it should get you to the loan (i still see it)
 

GTPpower

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so if it's money you want to invest i'm not sure how young you are or what else you are doing, but my first recommendation would be a roth ira and putting all 1000 into SPY then turning on dividend reinvestment (DRIP) then just leave it alone for 40 years.

if you want something more liquid then may high yield checking but note that doesn't appear to be all that high yield now and usually has little monthly hoops (little over 2%)

CDs are a good option for more safe interest; you just can't take the money out until completion which still seems fine for you. this is 2.7-3%.

i wrote a bot to invest in lending club, i would suggest just doing an auto-invest thing there. basically you are investing in consumer debt. realistically you can expect 3-7%, although you control the risk and that means you could still lose money or you could earn 10%. i think if i refer you and you put in 1000 that we'd actually both get $50 and you'd be up a good chunk.

basically you invest in loans and spread your risk by investing in multiple different ones. ie. you put $25 into someone's A grade home improvement loan and $25 into someone's higher interest but higher risk B grade debt consolidation loan. ideally you spread the risk among 100 loans ($2500).

i could help set up a simple conservative account there for you (mostly A-C loans) and you could expect to beat a CD as a result. similar to a CD though it's not super liquid; the loans are 36 and 60 month loans. although there is a secondary market, so if you wanted to sell a loan for cash, you could.
I'm not really looking for an investment for this. Even a CD would be too long of a period. I'd like something I could cash out in a month, for example, if i needed to.

I just have this sitting in it's own savings account, just in case. It most likely will never be used.

I am interested in your bots though. I like how you're able to split it up between lots of different loans. In my mind, that alleviates a lot of risk.
 

GTPpower

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The best savings accounts dont even cover yearly inflation rates.

Unless you're investing your money, you're still losing money in the longrun.
It's not an investment, just a safety blanket.

But your comment got me thinking. I wonder how many whopper's I can buy with $19M in 500 years.

 

ilikemtb999

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I use ally for savings and worth it over letting it sit in my credit union savings. I keep money I may need access to but don’t really touch much. They’ve been great to deal with.
 

sickmint79

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I'm not really looking for an investment for this. Even a CD would be too long of a period. I'd like something I could cash out in a month, for example, if i needed to.

I just have this sitting in it's own savings account, just in case. It most likely will never be used.

I am interested in your bots though. I like how you're able to split it up between lots of different loans. In my mind, that alleviates a lot of risk.
i'm still sorting my stuff out and seeing if i can make something that scales at all to other people. else it is best just to go with auto-invest and a conservative mix of loan grades.

here's some lendingclub historic data.



you can see at 100+ notes your risk decreases substantially. even the lowest 10th percentile people have historically done an apparent 2.5%. $25/loan * 100 = $2500 though. if you only want to do $1000 then sticking with A/B grades for now would be another way to minimize risk. having all A/B would also offer you more protection were we to have an economic downturn. also note people below that 10th percentile have lower returns or even lost money. this is likely because they made some pretty poor choices though.

1 month to liquidate would not be a problem if you wanted to cash out. really if you tried to cash out of your whole portfolio, it would depend on how you priced your loans, i suspect it could be done much more quickly than a month.

lendingclub is a decent option to consider. so is their smaller but still large competitor, prosper.com. once my programs work for a few weeks and collect some data i'll probably do a write up about them on one of my websites. i think my bot has a competitive advantage though so i won't be detailing how it works. given that i consider the above loan i told Knowklew to buy has been available so long, and seems obviously juicy to me, i feel like i am going up against a bunch of weak competitors in this space. which is perfect lol.
 

GTPpower

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Very nice. Something like that, I'd probably stick $2500 into. Definitely let me know when you get it going.
 

Knowklew

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note that it is a secondary market note - not a new loan - it's a loan someone is selling with 24 remaining payments (of an original 60)

invest -> trading account -> go to the note trading platform

from here you can try to manually find it (a pain, since you can't search by loan or note id) - or use the filters, or you my link above (searchy) - click or copy and paste it and it should get you to the loan (i still see it)
Found it.
 

sickmint79

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accidentally invested, urm, a lot in one day while still ironing out my program. in any case finding pretty juicy stuff now, although no money in the current account to actually pick them up. negative fico_drop here means the fico score went up too.

 

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