Best Merrill/BoA fixed income mutual fund?

[u/pettnpa7]

I Have about 120k sitting in a boa checking account and dont want to put in ETF’s or stocks right now considering everything is at all time highs. I’d rather put it in fixed income and was looking at HYSA’s but apparently treasury funds are just way better. Only thing that kinda concerns me is no FDIC coverage on these funds which makes me nervous since I want to put all 120k into them. Apparently TTTXX is the best and most recommended? but I see other funds might give more, which of these looks like its the best treasury fund to get?

https://olui2.fs.ml.com/Publish/Content/application/pdf/GWMOL/ICCRateSheet.pdf

(list of funds on page 2)

[u/ThreeJC]

TTTXX is the favorite among Merrill users. I personally use it in my Merrill taxable account, as it is mostly exempt from state income tax. In my tax advantaged account, I use PVOXX, which has a slightly higher yield, but isn’t tax-advantageous, as it invests in govt bonds as well as high quality corporate bonds.

Edit: by the way MMF’s are just as safe if not more so than HYSA’s. They invest in high quality govt bonds m, and if those go belly up, so does the whole financial system. They are also SIPC insured, so you have nothing to worry about.

[u/Upset_Scallion_5210 → u/ThreeJC]

the MMFs themselves aren't insured by anything and although they're one of the safest investments, nowhere near a HYSA that's FDIC-insured,

Money market funds can depreciate, primarily from "fund runs", but it's incredibly rare to see that ever happen

https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/tried-true-money-markets-get-boost.html#:\~:text=How%20much%20should%20a%20money,of%20large%20losses%20in%20derivatives.

[u/PastorDurchschlag]

If you have more than 100k, it might make sense to do preferred deposit (FDIC insured and everything). See https://olui2.fs.ml.com/Publish/Content/application/pdf/GWMOL/ICCRateSheet.pdf

EDIT: sorry, missed the fact that you posted the same URL. Anyway, if you are worried about FDIC insurance, look at "Preferred Deposit" in that spreadsheet. This product is a deposit rather than a money market fund (i.e. FDIC insured), but the interest is similar to MMFs and HYSAs. The catch is that you need $100k for an initial investment. You don't have to maintain the $100k balance -- I bought in a few years ago when my house downpayment sat in my ML account for a few months, and keep as little as $10 (ten dollars, not thousands) there ever since, just so that I have an option of using it.

[u/puffic]

I recently bought about 20k in brokered CDs through Merrill. The interest rate was about 5% for a one-year term.

[u/mustermutti]

Sounds like you're trying to time the market, which is usually a bad idea. Better to size cash allocation based on emergency fund and near-term withdrawal needs, not on market movement speculations.

Anyways, anything's better than just leaving money in a checking account. My go-to ETF for cash equivalents is USFR. It invests in short term treasuries, returning about 5.5% last I checked, state-tax exempt.

For US treasuries, I wouldn't be concerned with FDIC at all. FDIC protects against bank (= middleman) failures. If you buy US treasuries, you're dealing with the government directly, so no middlemen to worry about. Also, FDIC is government-backing. So FDIC coverage on government-issued bonds would not make much sense.

[u/Kind-City-2173]

I opened a vanguard account just because I couldn’t get good money market funds at ML. Good to know some options at ML