What to do with pending home purchase downpayment sitting in the saving account doing nothing?

if i have an amount of money set aside for future home purchase down payment, sitting in a saving account with the current interest rate ...

how can i better make the money work for me? (besides earning interest in the saving account)

the catch is that the amount of fund *may* be needed for home purchase down payment soon (3 to 12 months, don't know when exactly though)

advise needed, thanks

 

Hopefully you already have the money in a high interest savings account (i.e. ingdirect, hsbcdirect etc)?

 

tell me more!

are they FDIC insured

(of course, the easier way is i go to their branch and get the info)

 

As far as I know you have to do this over the internet. I am pretty sure they are FDIC insured. I have used ing direct for two years now and have been happy with the service. The other two listed currently have higher interest rates and I know others have used them. I am not sure what interest rate your local bank has, but usually these are higher.

http://home.ingdirect.com/

http://www.hsbcdirect.com/

https://www.emigrantdirect.com

It does take a few days to transfer funds in and out so you do have to plan ahead a bit.

 

thanks, i will look into them

any other ways to make the money work for me more? ;-)

 

how much return are you looking for? 3 - 12 mo's?

 

you can always look at short term cd's at your local credit union. they have decent rates sometimes.

considering you've planned for a house and saved for it. I'd stay away from higher risk investments. And don't ask this question to a stock broker!

 

Keep in mind that your downpayment money must be traceable as YOUR funds. So make and keep a paper trail of the opening of the new account.

In other words if an account just appears out of nowhere the underwriter must presume the money is not yours.

Many of the best loan types require that all the funds be your own funds so transfer funds from the old account to the new and keep a record of the funds being withdrawn and a record of the deposit.

MAKE SURE THE DOLLAR AMOUNTS MATCH EXACTLY! In other words don't keep a few dollars or add a few dollars.

DON'T open the new account with funds that haven't been seasoned in another account like from a paycheck, inheritance, etc. While it might be legitimate there's no way to prove that the money used to open the account wasn't borrowed, a gift or drug money.

Underwriters must presume the worst case absent any proof.

 

One link down from off-topic: https://www.s2ki.com/forums/index.php?showforum=179

Good luck, it's also nice to know the $$ is there when you need it if you find the right house, we kept ours in savings and sure enough, just a few days into the search we found the perfect house for us!

 

I would toss it in a high interest online savings account. Personally I use emigrant direct and I am very happy with the service. All these accounts are run by major banks and are fully FDIC insured to $100,000. You generally have to do all transactions online. This is better than a CD in your case because you do not know when you will need the money. Also, at 5.05-5.15% apy, you will barely make any more interest off the best CD. I would not put the money into the market if you really need it since there is a possibility of taking a short term hit. Online savings is a risk free 5%.