Best Nationally Available High APY Liquid Accounts

Look into the BOXX etf. It earns roughly the short term treasury rate, but doesn’t pay distributions (for the most part) allowing you to compound your gains until you choose to sell. And then when you sell, it’ll be capital gains, hopefully long term capital gains if you managed to hold it a year or more.

https://etfsite.alphaarchitect.com/boxetf/

The one blip in the chart is the only time they paid a distribution, and I think they changed their underlying strategy slightly so hopefully that won’t happen again.

Do be aware that if your state taxes income, it may or may not be worth it vs owning treasuries since treasuries are state tax exempt while the capital gains from this etf would likely be fully state taxable.

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Gr8 suggestion!
thx to Ducey AZ has only 2.5% taxes…for now.

Even after a year, their prospectus sounds like 60% will be treated as LTCG and 40% will be STCG:

“Exchange-traded options on certain indexes, such as the SPX, are currently taxed under section 1256 of the Internal Revenue Code of 1986 (the “Code”). Pursuant to section 1256 of the Code, profit and loss on transactions in non-equity options, including SPX options, are subject to taxation at a rate equal to 60% long-term and 40% short-term capital gain or loss regardless of the Fund’s holding period.

And that’s assuming that the IRS does not rule against their categorizing of the gains as LTCG, which is a risk BOXX highlights in their own prospectus.

“Additionally, section 1258 of the Code requires that gain be recharacterized as ordinary income if it is derived from any transaction in which substantially all of the expected return is attributable to the time value of the investment in such transaction and which falls into certain categories defined in the Code (a “conversion transaction”). If any of the Fund’s transactions are deemed to be conversion transactions, gains recognized, if any, from such transactions would be treated as ordinary income, which could result in the Fund being under-distributed with the same consequences as described above.”

Since expected returns appear to me pretty damn linear in time, I don’t think it’s a negligible tax risk.

So there may be some tax benefits vs dividends or interest but it doesn’t seem as much of a free meal from their own disclosures. And if located in a high-tax state, even if the tax benefits materialize as planned, you may be better off with simple T-bills.

I think they’re using single stock options instead of 1256 ones now, which avoids the 60/40 issues.

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I don’t think that’s the conclusion I reached from from this part of the prospectus:

“The Fund expects to use options on broad-based diversified assets such as the SPDR® S&P 500® ETF Trust for substantially all of the Fund’s holdings.”

Another thing is that the current level of expense ratio of 19.49 bps is only guaranteed until the end of Feb 2025. So for a 1-yr plus strategy, the expense ratio discount of 20 bps may no longer be offered.

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I’m not an expert on this, but I think using SPX index options was worse than using SPY etf / stock options somehow.

They do mention that if need be, they may use box spreads on other ETF indexes or even on individual stocks. But it did not sound like the default.

Now IF they happen to use box spreads on individual stocks only, then they may not have to characterize the capital gains as long-term gains but I was not very excited at the uncertainty of the tax treatment since that’s the main idea behind using BOXX instead of T-bills directly.

Personally, I figured that by the end of Feb 2025, I’d know more whether the juice is worth the squeeze…

Is anyone personally familiar with either of these two newcomers?

Pibank: currently offering a 5.50% APY Savings Account

TIMBR: currently offering a 5.25% APY Savings Account

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Never heard of them.

Lending Club Savings was 5.30% now 5.15%
Total Bank MM was 5.26% now 5.11%
State Bank of Texas MM was 5.22% now 4.96%
Vio Bank MM was 5.20% now 5.05%
Brio Direct Savings was 5.15% now 5.05%
Jenius Bank Savings was 5.05% now 4.80%
Western Alliance Bank Savings was 5.01% now 4.81%
Bread Savings was 4.95% now 4.75%
Popular Direct Savings was 4.85% now 4.76%
Western Alliance Bank Savings(via raisin) was 4.70% now 4.65%
Dayspring Bank Savings(via raisin) was 4.67% now 4.57%
American First CU MM(via raisin) was 4.65% now 4.60%
Adda Bank Savings(via raisin) was 4.65% now 4.55%
Cloud Bank 24/7 Savings(via raisin) was 4.65% now 4.62%
CFBank Savings(via raisin) was 4.60% now 4.50%
Generations Bank MM(via raisin) was 4.60% now 4.34%
The State Exchange Bank Savings(via raisin) was 4.55% now 4.47%
Marcus Bank Savings was 4.25% now 4.10%
American Express Savings was 4.10% now 4.00%
Discover Bank Savings was 4.10% now 4.00%
Capital One Bank Savings was 4.10% now 4.00%

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Primis is currently 4.5% checking and 4.75% savings with $1 minimum, no fees. I had an account there but it was closed by them for reasons I’m not too sure of. I primarily used my savings as there’s currently no limit of withdrawals so I had it linked to monthly payments and deposits. I’m looking for another easy to use bank with similar interest rates.

I’d recommend Primis even though my account is closed. Just beware it’s a smaller bank and might be leery of frequent withdrawals and deposits.

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And old accounts with the grandfathered rate seem to be holding at 5.07% APY. At least mine is.

For savings accounts, that will often be a concern. Even with no stated transaction limits, they still want usage to fit the account category.

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Drops:

Bank5Connect Savings was 5.10% now 4.95%
Brio Direct Savings was 5.05% now 5.00%
Vio Bank Money Market was 5.05% now 4.90%
CFG Bank Money Market was 5.00% now 4.90%
MyBankingDirect Savings was 5.00% now 4.85%
Northern Bank Direct Money Market was 4.85% now 4.75%
Cloud Bank 24/7 Savings (via raisin) was 4.62% now 4.57%
Quontic Bank Savnigs was 4.50% now 4.25%
Barclays Bank Savings was 4.20% now 4.10%
Self Help CU MM was 3.36% now 3.15%

2 new accounts:

Timbr(Bridgewater Bank) Savings 5.25% https://timbrfinancial.com/

Patriot Bank MM 5.10% https://bankpatriot.com/online-money-market

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Thank you, @zzz . It’s very nice to see your regular and accurate updates.

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(post deleted by author)

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Lending Club Savings was 5.15% now 5.00%
Valley Direct Savings was 5.05% now 4.80%
EverBank Performance Savings was 5.05% now 4.75%
Western Alliance Bank Savings was 4.81% now 4.46%
Merchants Bank of Indiana MM was 4.75% now 4.50%
Evergreen Bank Savings was 4.75% now 4.50%
Virtual Bank Money Market was 4.75% now 4.50%
Republic Bank of Chicago MM was 4.71% now 4.61%
Western Alliance Bank Savings (via raisin) was 4.65% now 4.35%
American First CU MM was 4.60% now 4.45%
UFB Portfolio Savings was 4.57% now 4.31%
UFB Portfolio MM was 4.57% now 4.31%
Blue FCU MM (via raisin) was 4.50% now 4.25%

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