Bonus - 6% online savings

finance13:

FYI - If you're sitting on a signing bonus HSBC is offering a 6% online savings account.

Yeah, 6% til the end of April I think, then it's about 5% after that. Still not a bad deal, and more accessible than a CD

6% interest is very low :(

can you make more?

Definitely I can Skiptomylou.

pretty good considering most money market accounts are only yielding about 4.5%

Ivan please enlighten us.

Point is that those sitting on the bonus need to a) know it is there and b) need it readily available.

Putting this money in a high yield savings account is a smart move. Putting it in the market is riskier, and given our extremely risk adverse situation at the moment, a foolish idea (unless your pockets run deeper than most).

well, what i do not understand is calling a 6% deposit a "high-yield savings account".

6% return is close to nothing, to be honest. It is a good level of return for a risk-free investment, but it is negligible as a return per se.

Talking about the risk of putting bonus money in the market - you should rather consider a risk/reward relationship, not just a risk level.

Besides, what I also do not quite understand is why you are extremely risk-averse? imho, younger people should generally be more willing to take risks. While you're an analyst (or even associate), you won't probably posess more than a couple of hundreds of thousand dollars to invest. It is very doubtful that some 10-20% loss of this amount (if it happens) will be a catastrophe.

It is a "high-yield savings account" because it yields higher returns than your average savings account. That is just standard marketing speech for these banks.

6% is not close to nothing. A return of 0.5% as in Japan is close to nothing. Risk free is risk free for a reason. Lower rates for presumably no risk. I am not talking making alpha here. This is a good rate to lock in if you need all the money in the near future (which means you can't commit to a CD, or similar investment).

I am extremely risk adverse at the present moment and for the next 4 months because I know I will need that money for an apartment, cloths, moving and other expenses. I can't afford to risk my bonus money on the market. I am quite familiar with risk/reward relationships and have decided to accept a low risk/low reward profile for the next 4 months.

I agree. Young people should be very risky in their early years. The old adage, take your age and subtract it from 120; this is the percentage of your portfolio that should be allocated in stocks, has its merits. I plan on being risky once I have settled myself in a new city and I am sure I will have a steady income and job. I am sure you will agree, that at that time it would be a wise idea to begin making more risky investments.

So to sum this up: I am quite familiar with investment and portfolio management and agree with your perspective on young=more risk. However, what I was trying to voice was that given our (incoming full time analysts) limited horizon and certain need for all the cash, I don't feel it is a wise idea to gamble on high returns. Take a decent interest rate on your "high-yield savings account" and be sure your money will be there when your landlord requires last months, this months and security deposit.

rf is well below 6%. for a cash product that is great. if you want to catch a rally w/o equity risk, i'd hit a high-yield bond portfolio. many are up 2-3% ytd.

You are an absolute idiot if you put your bonus money in anything more risky than a money market fund if you are going to need the money for moving expenses this summer. That is all.

for a savings account, 6% is a lot. For a portfolio account, that can be considered kind of bad.

Hmm..it goes without saying that it is possible to earn more than 6%...this is too ridiculous for me to even finish the argument. Everyone else has already covered what I would have said anyway.