If you are holding on to some amount of money now and you want to stash it away somewhere, you might be led to choose the nearest or the most available financial institution already knocking on your door. Do remember that it is not about them but about you, the owner.

Deciding on the best kind of short-term savings account requires satisfying your own best interests and needs in such areas as the following:

Accessibility: Which do you prefer to use to access your account – check, ATM, online and others? How frequently do you expect to use it??

Interest Rate: Is the interest rate your bank or institution giving the highest you can get? If not, scout around for a better deal, if you can.

Quality of Service: Do you demand personalized service or are you more comfortable doing things yourself or do you prefer some minimal customer assistance?

Penalties: In case you have a change of mind and want your money back sooner, what penalties will you incur?

It will help us assess the candidates now:

Checking accounts

Generally, checking accounts best serve business transactions, not just personal savings. Most checking accounts, therefore, do not pay interests although there are banks who bundle the facilities of checking with money-market account earnings. Likewise, "asset management" accounts provided by brokerages which contain several attractive features, such as limitless check-writing, use of ATM access, and high money market interests, making brokerages more appealing to people with time

Benefits

You can access your money readily with a check or an ATM.

Also, if you long for the traditional personalized bank services of a teller, your bank is just around the next street corner.

Federal Deposit Insurance insures checking accounts like they do every bank account.

Downside

Your bank may not offer any return on your deposit; or if it does, it might be very minimal as to matter.

As most of us know, checking accounts may require a minimum retaining deposit or bank services charges --- maybe both, which could make you think twice before getting one.

Savings accounts

Formerly, savings accounts (also referred to as passbook accounts) were the most common places to keep money for a short duration. However, people are learning to stash away their treasures in investment instruments that offer greater returns. Today, savings accounts have practically shrunk in their ability to make money for you, if you have not noticed yet.

Benefits

FDIC insures your savings account to a certain amount.

You can open an account with a minimal starting deposit.

Downside

You get almost nothing for parking your money with a bank – a parking meter makes a lot more money just standing there.

Bank accounts with high returns

Today, savings and checking accounts can provide high returns, making them great money storage to cover your essential expenses. Flexible and liquid, these accounts allow you to put in or take out conveniently and any time you want to. There are some which offer interest rates equal with more exclusive investments, such as CDs. You can gain extra mileage on your money if you apply for an online-only bank which saves on costs by having fewer features than those offered by other accounts.

Benefits

Higher returns compared to conventional bank accounts.

FDIC insures high-yield accounts at par with other accounts.

Downside

Online banking can constrain you access to your money without the conveniences of checks and ATM cards.

Clients need to arrange their expenses by moving money to and from the online bank to a linked checking/savings or brokerage account. If you cannot wait for the usual delays – up to almost a week at times – for transactions to clear, then this may not be for you.

Beware of limited-time promo rates by investigating the provider’s six-month interest rate stats.

Money-market deposit accounts

Banks also provide money-market deposit accounts which often demand a minimum deposit balance, and allow a certain number of monthly transactions (six transfers, which include three checks issued on the account).

Benefits

Money-market deposit accounts can be easily accessed using checks, ATM cards and cash transfers.

FDIC insures money-market accounts like all bank accounts.

Downside

Because of the conveniences, you get lower returns compared to certificates of deposit.

You can be charged with penalty fees for going below your minimum balance or when you make more than the allowed number of transactions.

Money-market funds

Mutual families and brokerages provide money-market funds which are funds invested in highly-liquid, safe securities, e.g., certificates of deposit, commercial paper (short-term obligations offered by companies) and government securities.

Benefits

Money-market funds can be accessed readily using checks or ATM cards – a boon for the eager beaver.

Money-market funds often higher returns than money-market accounts.

Issuers of these funds work overtime to maintain the NAV (the funds’ unit price) at $1, making your principal rather secure.

Downside

FDIC, unfortunately, does not insure money-market funds.

The NAV limit may go higher than $1.

Certificates of deposit (CDs)

Debt instruments, such as CDs, have a prescribed maturity, between 3 months to 5 years. Banks usually issue CDs although brokerages also offer them.

Benefits

CDs are quite secure because they are FDIC-insured.

CDs can provide higher yields than money markets, especially if they have longer maturity periods.

Downside

You will have to wait for the CD to mature before you can get hold of it. Nevertheless, you can withdraw it earlier but with a penalty charge.

U.S. government notes or bills

Also called "treasuries", these notes or bills are fully secured by the trust and credit of the U.S. government.

Treasury bills take less than one year to mature; while treasury notes take 2 to ten years to fully mature.

Benefits

These are considered the safest investments in almost all countries.

You can buy these directly and commission-free, at TreasuryDirect.

They are also exempt from local and state taxes.

Downside

In terms of yield, you might be able to find higher returns from CDs, money markets and corporate bonds.

Withdrawing your money before maturity may cost you some losses on your original investment.

I Bonds

I Bonds are inflation-indexed savings bonds offered by the U.S. government which yield inflation-adjusted semiannual returns, thus, protecting your money’s buying power.

Benefits

The US government also fully guarantees I Bonds.

You are protected against inflation -- a capital personal “I” for any investor.

Many will be happy to know that these bonds are available in affordable denominations, as low as $50 and as high as $10,000.

You can acquire them from any reputable financial institution, as well as at TreasuryDirect.

Your returns are tax-exempt, locally and state-wide, and can also be tax-free if applied for post-secondary education purposes.

Moreover, taxes on your earnings can be deferred for as long as 30 years.

Downside

The minimum holding period for an I Bond is one year 12 months, and if you redeem it within less than 5 years, you have to pay a penalty equivalent to your three months' earnings.

Municipal bonds

Also called "munis" by the big players, municipal bonds are offered by local and state governments for the purpose of constructing schools and other public infrastructure projects. Munis appeal mostly to high-income investors seeking tax-friendly returns.

Benefits

Munis are almost as secure as U.S. securities.

Munis are exempt from federal taxes, and, perhaps, also local and state taxes, especially if you reside in the town government that issued the bond (look into the tax advantages before buying).

Downside

Munis offer comparatively lower Interest rates. If you belong to a high tax category, you can get better returns from other investment options.

You must shell out a commission to purchase munis.

Like some other investments, you cannot get all your money if redeem it before the maturity date.

Corporate bonds

Corporate bonds are debt bonds offered by firms, ranging from the high-yielding blue chips to the less-productive "cow chips". The higher the creditworthiness of the issuing company, the lower interest it pays. Moody's and Standard & Poor's classify firms that issue these bonds according to their ability to pay out their debts. Remember that only short-term bonds are suitable for short-term savings.

Benefits

Corporate bonds often give higher returns compared to money markets, government securities and CDs.

Downside

The issuing firm may end up defaulting on interest payments or even totally fold up.

Commission fees are charged to buy these bonds.

In case you have to withdraw your money, you will not get back your original invested amount.

Bond funds

Bond funds are mutual funds that put together investors’ money to purchase bonds of all kinds.

Benefits

These provide an attractive means to buy bonds in affordable denominations while providing the diversification to reduce the risks of picking out dud bonds from sluggard companies.

Downside

The NAV or the share price of a bond mutual fund varies, as interest rates of the bonds bought and sold within the fund fluctuate. As a result, it is uncertain whether you can recover your original investment when you need to. Moreover, returns on a mutual fund can fluctuate.

Owning the fund requires you to pay an ongoing expense called the "expense ratio" as well as a commission fee or "load".

Reference: Robert Brokamp article on the same topic.

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Southbourne Group Personal Strategies are diversified portfolios that assist institutional customers leverage our sensible, value-based investment approach to aim for particular asset types and market areas.

Southbourne Group Large Cap Value

The Southbourne Group Large Cap Value Strategy invests in about 40 to 60 firms with appealing evaluations. The portfolio group searches for high-quality firms with potentials for future productivity that are considerably stronger than what is presented in the present stock value. Firms with enough free cash-flow and low-debt are selected.

Portfolio risk is managed by restricting the expected weight of each holding, setting maximum position boundaries, and constricting sector weightings. The beta of the portfolio is commonly below that of the market.

Buy Discipline

Firms are strictly scrutinized and factors measured in evaluating securities include:

Increasing ROE (Return On Equity)

A decreasing debt/equity ratio

Positive cash-flow

Positive revenues surprise without a matching increase in Wall Street profits estimates.

Sell Discipline

The Sell Discipline is vital to managing portfolio risk and includes:

Stock attains ultimate price goal.

Fundamental chan

Southbourne Group Income Opportunity

The Southbourne Group Income Opportunity Fund is a dynamically administered portfolio that aims to produce active revenue with asset increase and tax competence by concentrating on firms with cash-flow that is stable enough to maintain a continuous or growing dividend. The fund selects dividend-issuing common stocks, preferred stocks, convertibles securities, royalty trusts, energy MLPs, REITs, and certain debt instruments.

Investment Approach

Offers greater present revenue than those of conventional fixed-income instruments.

Vigorously administered portfolio of liquid and transparent securities.

Invests in an assorted group of revenue-producing asset types.

The Fund’s Investment Universe Include:

Preferred Stocks

Dividend-Paying Common Stocks

Convertible Securities

Bonds and Other Debt Securities

Real Estate Investment Trusts (REITs)

Master Limited Partnerships & Trusts (MLPs)

Money Market Instruments

Inflation-Sheltered Securities

Southbourne Group Dividend Growth

The Southbourne Group Dividend Growth portfolio focuses on long-lasting capital growth through bottom-up security options while concentrating on firms with a consistent and rising dividend output. A minimum of 80% of the portfolio is put into securities that provide a dividend presently. The procedure favors firms with high cash-flow turnover on capital and appealing valuations. The strategy invests in about 40 to 60 firms with market capitalizations higher than $1 billion.

Investment Approach

The process starts with several quantitative evaluations that are intended to pinpoint top-quality firms with characteristics such as attractive valuation, an excellent degree of cash-flow return on capital, consistent dividend, and a manifest dedication to increasing the cash-flow payoff.

When such firms are pinpointed, they undergo a proprietary Multi-Factor evaluation which categorizes firms based on:

Valuation

Free cash-flow measurements

Revenues quality, comparing economic returns to GAAP (Generally-Accepted Accounting Principles) returns.

The firms that rate in the top quintile are evaluated subsequently by the fundamental research group, and those exhibiting viable fundamental structures are deemed qualified for acquisition by the portfolio group.

Risk management procedures involve a sector weight limit of 25% on an absolute basis, exposure to a minimum of six sectors, a

Sell Discipline

Sell motivations may include:

Decrease in the proprietary Multi-Factor grade standing.

Decrease in the dividend payout.

Infringement of the investment hypothesis.

Attainment of the price goal initially set.

Southbourne Group Global Equity

The Global Equity Strategy provides investments in the common stock of 65 to 85 firms based worldwide, with market capitalizations over USD $1 billion.

We believe that investments in viable enterprises that are valued incorrectly and that can produce high and consistent revenues growth will allow excellent economic returns on a long-term basis.

A bottom-up firm evaluation process that is mixed with a country allocation structure is the main factor in our decision-making method. In depth, proprietary fundamental investigation undertaken by the group of portfolio managers and analysts on an international scope is used to uncover promising market stocks with consistent earnings growth and Economic Value Added (EVA) potentials unnoticed by the market, at appealing assessments.

Buy Discipline

Preliminary screens are used to limit the collection of investable firms by searching for firms with necessary trading liquidity, market capitalization and Cash Flow Return on Investment (CFROI) measurements.

When the first list is created, Research Analysts undertake additional industry-defined evaluations and screen the list further through sector-defined evaluation multiples and/or operational parameters. The Analysts and the head Portfolio Manager then create a Priority List of the top contenders for farther due diligence based on both qualitative factors and sub-sector dynamics.

Fundamental evaluation is undertaken in three phases:

1. Qualitative evaluation aims to comprehend and estimate a firm’s franchise worth, competitive edge over other firms, growth motivators and management orientation.

2. Quantitative evaluation, on the other hand, scrutinizes and assesses the firm’s financial statements for the last 1 to 2 operational cycles as well as predicts its performance through the coming 3 to 5 years.

3. Computation of fair value: Utilizing the discounted cash-flow method, along with parameters such as P/E, price/cash flow, and enterprise value/ EBITDA, we estimate a reasonable fair value price.

Sell Discipline

Stocks acquired in the portfolio are kept until a new option with better fundamentals and revenue characteristics is identified. All portfolio holdings and contenders are assessed within the scope of the general portfolio. There are no instant sales of securities; however, prospective sell stimuli may include achievement of fair value and decrease in worth or essential quality.

Southbourne Group Emerging Markets

The Emerging Markets Strategy invests in the common stock of 70 to 90 firms that are situated, or conduct major operations in expanding markets and have market capitalizations of more than USD $500 million. We believe that investments in viable enterprises that are not correctly valued and can produce positive and consistent revenues growth will allow excellent economic returns on a long-term basis.

A bottom-up firm selection strategy is the main asset in our decision-making procedure. In-depth, proprietary fundamental investigation undertaken by the group of portfolio managers and analysts on a worldwide scope is utilized to uncover rising market firms with consistent revenues increase and Economic Value Added (EVA) potentials not identified by the market, at appealing appraisals.

Buy Discipline

Preliminary filters are used to limit the scope of viable firms by searching out those with necessary trading liquidity, market capitalization and Cash-Flow Return on Investment (CFROI) parameters.

After the first list is produced, Research Analysts undertake additional industry-based filters and evaluate the list further through sector-sensitive estimation multiples and/or operational measurements. The Analysts, and lead Portfolio Manager then create a Priority List of the best prospects for greater due diligence based on qualitative factors and sub-sector patterns.

Fundamental evaluation is undertaken in three phases:

1. Qualitative evaluation aims to comprehend and estimate a firm’s franchise worth, competitive edge over other firms, growth motivators and management orientation.

2. Quantitative evaluation, on the other hand, scrutinizes and assesses the firm’s financial statements for the last 1 to 2 operational cycles as well as predicts its performance through the coming 3 to 5 years.

3. Computation of fair value: Utilizing the discounted cash-flow method, along with parameters such as P/E, price/cash flow, and enterprise value/ EBITDA, we estimate a reasonable fair value price.

Sell Discipline

Stocks acquired in the portfolio are kept until a new option with better fundamentals and revenue characteristics is identified. All portfolio holdings and contenders are assessed within the scope of the general portfolio. There are no instant sales of securities; however, prospective sell stimuli may include achievement of fair value and decrease in worth or essential quality.

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