Cash Trust Investments Are They For You?
There are three variables that all investors have to keep in mind. Security, Liquidity and Rate of Return. Cash trust investments are a good mix of the first two variables, while scoring fairly low in the last one. Still, they have their place in any investor’s balanced portfolio.
A cash trust investment is an investment product that pools the assets of several small investors and shops them around to banks, buying Certificates of Deposits (CDs) at advantageous interest rates. Because of the large sums invested, banks are willing to give a better investment rate for them. Most of these CDs are bought as ladders – the money is divided into 12 parts and CDs are bought sequentially. By spreading the investments out over several banks, with all deposits kept at $98,000 each. As the Federal Deposit Insurance Corporation (FDIC) insures individual deposits of up to $100,000 in the United States, this retains insurance on your investment and makes the investment more secure.
Because of the aggregated nature of a cash trust investment, its liquidity is generally better than buying individual CDs as a private investor. The well managed cash trust fund maintains around 15 to 20% of its assets in liquid form, making it possible for them to help an investor who needs to liquidate his holdings to meet a near term financial emergency. On top of that, most of these investments have somewhere close to 10% of their assets (bought as Certificates of Deposit) maturing every calendar month. This compares well to the lack of liquidity in fixed investments and bonds and bond funds.
From the perspective of a small investor, Cash Trust investments are low-yield and fairly safe products. They often turn on regularized payouts, much like buying an annuity for a structured settlement. If you’re going to do a cash trust investment, treat it as your middle term reserve fund. It’s going to be a stable vehicle for your finances, but it’s not going to grow your asset base that much. Using the traditional retirement mix of packages, a cash trust investment is a good resource to do in the last 5 or 7 years before retirement and should be gradually phased out in favor of a bond fund after retirement. Many, but not all cash trust investments request that you pay a regular amount in each month, on top of an initial $2,000 investment.
The best benefit of a cash trust fund is its low overhead. Because there’s little risk in it and there’s little pressure to “pick the hottest stocks”, there’s strong price competition among vendors – the setup fees are fairly low and the transaction fees taken from payments to you are also small and often times waived. This compares well with the transaction fees on mutual and hedge funds and the broker percentages taken from payouts.
Copyright 2007 Jim Sterling - All Rights Reserved
Don't Let Tax Breaks Bail Out Banks, Grassley Urges - CFO.com Magazine
| |
Moody's comments on UBS Q2 2008 earnings - The Asian Banker (subscription)
| |
Hagens Berman Sobol Shapiro: Firm Appointed Lead Counsel in . - FOXBusiness
| |
Credit Suisse close to settlement over trader mispricing scandal - Financial Times
| |
NASDAQ Announces End-of-Month Open Short Interest Positions in NASDAQ Stocks as of Settlement Date July 31, 2008 (PrimeNewswire via Yahoo! Finance) NEW YORK, Aug. 11, 2008 -- At the end of the settlement date of July 31, 2008, short interest in 2,634 NASDAQ Global Market securities totaled 10,560,730,163 shares compared with 10,977,290,029 shares in 2,632 Global Market issues reported for the prior settlement date of July 15, 2008... | |
Russia will not benefit from its aggression (Times Online) You don't need to be a student of the crushing of the Prague Spring in 1968 to find the sight of Russian tanks rolling into a neighbouring country chilling. The Georgian crisis is about more than vital issues of humanitarian need and rule of law over rule of force... | |
Structured Settlement Niche Site for Sale Full Transfer Support (I will help you with the transfer). Site also includes:. - Videos - Photos - Ebay Affiliate Listings EURStructured SettlementEUR (Can be adjusted) - Amazon Books Listings EURStructured SettlementEUR (Can be adjusted) ... | |
UK to give Georgia 'practical' support (Epolitix via Yahoo! UK & Ireland News) The foreign secretary has called for Russia to fully implement its pledge to withdraw troops from Georgia and said the UK will play its "full part" in monitoring the ceasefire... | |
Hedge Fund's Art of a Bankruptcy - CFO.com Magazine
| |
Credit Suisse Fined 5.6 Million Pounds by U.K.'s FSA (Update1) (Bloomberg.com) Aug. 13 (Bloomberg) -- Credit Suisse Group will pay a 5.6 million-pound ($10.6 million) fine in a settlement with the U.K.'s financial markets regulator over lapses in its systems and controls... | |
Ciena sees SIV loss; CWA wins deals from two telcos - FierceTelecom
| |
Hagens Berman Sobol Shapiro: Firm Appointed Lead Counsel in Charles Schwab YieldPlus Class Action (PR Newswire via Yahoo! Finance) Today United States District Judge William Alsup appointed Hagens Berman Sobol Shapiro lead counsel in the class-action litigation against Charles Schwab Corporation involving Schwab YieldPlus Funds Investor Shares and Schwab YieldPlus Funds Select Shares ... | |
Britain Fines Credit Suisse for Pricing Errors (New York Times) The Credit Suisse Group was fined $11.2 million because of pricing errors in some asset-backed securities, an indication that agency was tightening its oversight of the investment banking sector... | |
All About Selling Your Structured Settlement A structured settlement is a financial vehicle including periodic payments, provided to the plaintiff during a personal injury tort claim in replacement for the lump sum settlement. This type of financial tool can only be setup by a ... | |
Full Year Statutory Accounts - Sydney Morning Herald
| |
Regulation EUR Credit Suisse fined 5.6 million by FSA - Chase Cooper Regulatory News
| |
Technorati Tags: Structured Settlement, Cash Trust Investments Are They For You?, Cash Trust Investments
-
- Structured Settlement
- Annuity Life Care Plans
- Benefits Of Structured Settlement
- Can You Sell Structured Settlement
- Cash Trust Investments
- Get Money By Selling Structured Settlement Annuity
- How Structured Settlement Equal Cash
- How To Make Money Buying Annuity Payments
- Importance Of Comparing Annuity Rates
- Is Selling Structured Settlement Right For You
- Make Money Buying Structured Settlement Annuities
- Options For Selling Annuity Payment
- Should You Sell Structured Settlement Payments
- Should You Take Cash For Annuity
- Structured Settlement Lump Sum Payment
- Tips For Selling Structured Settlement
- Understanding Annuity Funding
- Understanding Structured Settlement Company
- What Can Broker Structured Settlements Do For You
- Which Is Better Lump Sum Or Structured
- Social Bookmark This
- RSS Feed
Subscribe in a reader
-
- Privacy Policy
- Sitemap
- Resources
- Add URL
-