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How to earn 5.10%* on your cash (13x national savings acct avg)

Aug 22, 2023

Earn 5.10%* on your cash — and no, it's not too good to be true. Plenty's cash mgmt product isn't a savings account; it's a managed portfolio of money market funds. The same money market funds where billionaires and hedge funds park their cash; your investment is in good company - they're held with ~$20B in assets and usually requires a minimum $500M investment. We're now giving you access through Plenty with a $100 investment minimum. All of this is part of our commitment to make it possible for you to invest like the 1%.

Inflation rates are at their highest level in 15 years. Quick refresher: inflation is when prices of things rise over time — like how a quick domestic flight that was once $250 is now closer to $400. When it comes to your money, the simple truth is that inflation means your cash buys less now than it did before.

With a volatile stock market, is there a safe place to save your money while still earning a high interest rate? A savings account isn't your only option. We've found a very low risk way to not only preserve, but grow your hard-earned cash (and no, you don’t need to be a wealthy client or hedge fund with millions of dollars). With access to a cash mgmt portfolio that currently offers a higher yield, you can save like the 1% do.

TL;DR: Money market funds

Are a low-risk, high-return place to park your cash
Are portfolios of cash and government-backed investments (like bonds or t-bills)
Earn higher interest on your savings to offset the effects of inflation
You can sell anytime the market is open

What is a money market fund?

A money market fund is a type of portfolio that holds cash or government-backed securities. For the wealthy, it’s what they often use like a savings account. It's also what Wall Street's hedge funds and pension funds use when they need a safe place to park and grow their cash. Money market funds are considered extremely low risk on the investment spectrum, and they have their pros and cons, just like anything else. Here are a few things to keep in mind:

The Pros

They’re a high-yield way to grow your savings: at Plenty, you can earn 4.86% on your cash with access to a portfolio of money market fund (normally for wealthy clients, hedge funds, and big banks with $500M minimums).

You can withdraw anytime: unlike mutual funds or CDs, money market funds are highly liquid, so your funds can be withdrawn anytime with no lock-ups or penalties (withdrawals can take 2-4 business days).

They’re managed for you: when you invest in a money market fund, your money is combined with other investors' money to hire experienced people to manage the fund.

They’re SIPC insured up to $500k per account: money market funds are required by law to invest in assets that pose minimal credit risk. Since they have to follow strict rules and regulations, you can feel confident your investment is protected. The Securities Investor Protection Corporation (SIPC) is the investing/brokerage version of FDIC insurance (which is for checkings/savings accounts).

The Cons:

Withdrawing takes a few days; we'll sell your investment then transfer you the cash.

There are some fees: 5.10%* is after all fees (it's what you'll earn). Plenty's fee is 0.2% (we want to be upfront about that, we don't believe in hidden fees).

So, if you’re looking for a great way to save and invest while earning a high interest rate, you may want to consider putting your money to work for you in a money market fund.

- Posted by the Plenty team

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This information is for general informational purposes only. It is not intended to constitute investment advice or any other kind of professional advice and should not be relied upon as such. Before taking action based on any such information, we encourage you to consult with the appropriate professionals. We do not endorse any third parties referenced within the article. Market and economic views are subject to change without notice and may be untimely when presented here. Do not infer or assume that any securities, sectors or markets described in this article were or will be profitable. Past performance is no guarantee of future results. There is a possibility of loss. Historical or hypothetical performance results are presented for illustrative purposes only. An investment in a fund entails a high degree of risk, including the risk of loss. There is no assurance that a Fund’s investment objective will be achieved or that investors will receive a return on their capital.

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Plenty was founded to democratize access to financial products and tools that accelerate wealth building. Plenty Financial and affiliated entities. (“Plenty Financial”) provide a web, mobile, personal financial management and educational platform to consumers; some of these tools are freely accessible to all consumers, others require a fee-based subscription. Advisory services are provided in the form of software-first financial planning and investment advisory services for fee-based Subscribers. Plenty Financial RIA, LLC is an SEC-Registered Investment Advisor. All investments made are legally owned by you. Investing is inherently risky and Plenty does not guarantee positive performance. Investments are held in accounts at BNY Mellon | Pershings, the world's largest securities servicing company and are SIPC insured. Investing involves risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time.

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