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-   -   Best place to park temporary cash (https://www.englishforum.ch/finance-banking-taxation/292105-best-place-park-temporary-cash.html)

bowlie 23.05.2019 11:57

Best place to park temporary cash
 
I've got some cash (all very legal) that I need to put somewhere for 3-8 months. Just over 250k.

The big banks are not giving interest on these amounts, some are charging interest.

Any recommendations on alternativs I can look at?

LuganoPirate 23.05.2019 13:01

Re: Best place to park temporary cash
 
You don't mention the currency, so I'm assuming CHF. I'm also assuming you don't want any risk by investing in equities?

If you're Swiss resident Raiffeisen pay a nominal amount of interest, 1/8%. Otherwise look at some corporate bonds but for good 3A companies they don't pay much more.

You're actually in the same position as the pension funds, insurance co's and many individuals, where to put cash when cash pays you next to nothing!

Guest 23.05.2019 13:12

Re: Best place to park temporary cash
 
My back pocket (rent free)

DUTCH 23.05.2019 13:31

Re: Best place to park temporary cash
 
Quote:

Originally Posted by LuganoPirate (Post 3070591)
Otherwise look at some corporate bonds but for good 3A companies they don't pay much more.

Good advice. OP just keep in mind transaction costs for such short duration investment in bonds. Easily 0.20% brokerage in + Stamp duty 0.15% + Custody 0.20% + 0.20% brokerage out. Ballpark about 1% annual yield lost for an 8 month bond investment.

LuganoPirate 24.05.2019 13:09

Re: Best place to park temporary cash
 
Quote:

Originally Posted by DUTCH (Post 3070600)
Good advice. OP just keep in mind transaction costs for such short duration investment in bonds. Easily 0.20% brokerage in + Stamp duty 0.15% + Custody 0.20% + 0.20% brokerage out. Ballpark about 1% annual yield lost for an 8 month bond investment.

Yes, I wasn't taking that into account, and in fact the brokerage costs can sometimes be more than the interest paid, which I believe is also subject to a 35% withholding tax*. So all in all for such a short period it's probably better to take a bank deposit box and store the cash there!

You could consider a US$ money market fund, but you'll have a currency risk.

*Which is declared on your tax return so you'll only pay at your top tax rate.

st2lemans 24.05.2019 14:01

Re: Best place to park temporary cash
 
In the garden? :confused:

Tom

Treverus 24.05.2019 14:11

Re: Best place to park temporary cash
 
Its a Friday afternoon and nobody suggested Bitcoin yet?

Guest 24.05.2019 15:51

Re: Best place to park temporary cash
 
Quote:

Originally Posted by Treverus (Post 3070910)
Its a Friday afternoon and nobody suggested Bitcoin yet?


Jeeze............wake up, Bitcoins is already last year, we now got Phil MCR coins, far better:D:D

magic 24.05.2019 16:08

Re: Best place to park temporary cash
 
Quote:

Originally Posted by bowlie (Post 3070552)
I've got some cash (all very legal) that I need to put somewhere for 3-8 months. Just over 250k.

The big banks are not giving interest on these amounts, some are charging interest.

Any recommendations on alternativs I can look at?

There are other ways to lend your money out short term (with security against property) and get better returns.

PM if you want more information as to how this works.

Whatever you decide to do (as I am sure you will get approached by a few individuals) make sure you do your due diligence.

Spent quite a bit of time this year learning about the legals and compliance as I am doing similar for my partner Lorenza.

LuganoPirate 25.05.2019 16:51

Re: Best place to park temporary cash
 
Quote:

Originally Posted by magic (Post 3070971)
There are other ways to lend your money out short term (with security against property) and get better returns.

PM if you want more information as to how this works.

Whatever you decide to do (as I am sure you will get approached by a few individuals) make sure you do your due diligence.

Spent quite a bit of time this year learning about the legals and compliance as I am doing similar for my partner Lorenza.

The problem with this is it costs to register the charge against the property, which theoretically the borrower could pay, however if there is already a mortgage in place from a bank you'd need their permission to register the charge. In the event of a default it's quite a process to enforce the sale if you're have the second charge, and worse, if the property goes for the amount of the first mortgage, you'll see nothing.

It's a very risky thing to do unless you're a large company such as Cembra Bank.

PS. Cembra pay 0.1% on deposits, and then lend it out at +-10%!!


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