Are you sitting on cash that isn’t earning any interest? Are there better options? At Deerfield we recommend a Schwab Money Fund account that at the moment is offering 5-5.15% interest.
Not only does the Schwab Money Fund offer a significantly better return than other similar options, it also boasts immediate access to your money, no minimum deposit, and no transaction fees.
What could be better?
Keep reading for more insight into why I’m so passionate about this powerhouse product for strategically managing your surplus funds.
What Is Idle Cash?
Idle cash is money that’s just sitting around and isn’t invested or used for everyday expenses. It’s essentially money that isn’t producing any kind of return or earning interest.
Idle cash can actually lose purchasing power. That’s because in today’s economy, inflation has the potential to gradually reduce the value of that money. So, we typically recommend putting idle cash to work through savings accounts or investments.
Monitor Your Accounts
The first step to optimizing your idle cash is to keep an eye on how much you’re carrying in your accounts. Review your portfolio as soon as you can because the extra money in your savings account most likely isn’t keeping up with inflation.
Inflation increases costs. That means that $100 has far less worth and purchasing power now than it had 30 years ago. Checking and savings accounts are subject to a potential bank collapse; plus they don’t offer nearly enough interest to generate significant returns. And investing in CDs is tricky because you’re essentially locking yourself into those rates.
Even when interest rates climb, holding on to extra cash over time effectively minimizes the potential upside of your hard work, and the idle cash is still not making enough to battle inflation.
So the question becomes “What’s the smartest way to invest your idle cash to get the most return?”
Park Your Cash and Earn
If you can restrict access to your money for a lengthy period of time, you have several options for long-term investment possibilities. But some people aren’t in a position to make a long-term commitment with their money.
At Deerfield, we currently recommend parking your short-term cash in a Schwab Money Fund. These funds are designed to provide stability of capital, liquidity with lower risk, and better yields than other cash products.
Of course, there’s always a risk that the rates go down, but for a short three- or four-month investment, it’s a great option. Plus, there’s no fee to buy or sell out of it.
Clients I’ve Helped
I want to close this article by sharing examples of clients I’ve helped by parking their idle cash in Schwab’s Money Fund:
- A couple who recently came to us for help was getting ready to renovate their home. They stated that they needed to have cash on hand to make payments to the contractor for about three to four months. We sold some of their existing investments and then put the proceeds in a Schwab Money Fund.
- I was helping a family settle an estate. They didn’t want to endure any more market fluctuations but weren’t quite ready to pay out to their beneficiaries. My answer for them was to liquidate their investments and temporarily hold the proceeds in a Schwab Money Fund.
- Another client I recently worked with needed to do some house repairs and was planning to buy a car when the new 2025s come out in the fall. We sold some of her existing investments and put the money into a Schwab Money Fund where it could earn 5% and still be liquid.
Reach Out!
These elevated cash rates have already reached their peak and won’t be around indefinitely. Our team can help you capitalize on the potential returns available now by investing your excess cash in a Schwab Money Fund. Additionally, we’ll monitor market conditions and identify opportunities for adjustments as they arise
You can contact me by calling (317) 469-2455, emailing ssteel@deerfieldfa.com, or using my online calendar. To see what my clients have to say about working with me, click here.
About Susie
Susie Steel is COO, Wealth Manager, and Senior Shareholder at Deerfield Financial Advisors, a fee-only financial advisory and wealth management firm with offices in Indianapolis and Chicago. With over three decades of experience in financial planning, Susie’s approach has always been rooted in a spirit of service, treating each client as an extension of her own family. She simplifies the complex for clients, with the goal of creating a calm, trusting, and nurturing environment. Her unwavering commitment to the principle of “To whom much is given, much will be required” serves as the driving force behind her dedication, diligence, and empathy.
Susie obtained a business management degree from Ball State University, holds the CERTIFIED FINANCIAL PLANNER™ designation, and held the Accredited Estate Planner (AEP®) designation from the National Association of Estate Planners & Councils (NAEPC) from 2013 to 2018. Susie is actively involved with an extensive list of professional organizations, including NAPFA (The National Association of Personal Financial Advisors), a premier association of fee-only financial advisors, and has served on multiple boards, committees, and councils. Her consistent recognition as one of Indianapolis Monthly’s “Five Star Wealth Managers” for the past decade attests to her outstanding accomplishments (2009-2023).
Outside the professional realm, Susie has contributed to her community through numerous efforts including her involvement in the Financial Center First Credit Union (FCFCU), the Indianapolis Children’s Museum Planned Giving Council, the Kiwanis Club of Northwest Indianapolis, and Junior Achievement. She mentors women through the CFP® Board’s “WIN-to-WIN” program, embodies the spirit of Rotary Club of Carmel, advocates for Indiana Canine Assistant Network (ICAN), and actively serves on the board of the Mary Rigg Neighborhood Center (MRNC).
Susie and her husband, Kevin, reside in Carmel, Indiana, where they raised their three children. Outside the office, her focus centers around family, spirituality, and fostering meaningful connections. Embracing the concept of the body as a temple, her personal growth is nurtured through practices like strength training, yoga, and meditation. In her leisure time, she enjoys strolls with her dog, Lulu, and indulges in movies, podcasts, books, and the theater. To learn more about Susie, connect with her on LinkedIn.
