Advice needed - $1M short term capital preservation

Not sure if this is the correct area to post...

What would you do?

You recently sold your PPOR, net profit approx $1M.
Due to market uncertainty, you prefer to hold off on your next purchase until early 2021.

What to do with the capital in the meantime?
'High' interest savings accounts are ca. 1.5%, that's barely preserving the balance after tax.
Treasury and other bonds? Stash under the mattress?

Oh, and you don't have any other outstanding loans in this scenario

TIA for your suggestions!

 

With a time horizon of <6 months, holding it in anything other than cash would be reckless imo.

 

That's a tricky one if your reason for selling is you think property will drop significantly by 2021 so as to allow you to get back in a much lower price.

If your thesis does play out, then:
- if you put your cash in the bank - the risk here would be banks may need to recapitalise/be bailed out and may not allow you to access your funds (or even use your funds to recapitalise).
- if you put your cash under the mattress - cash is slowing getting phased out and may be banned for large purchases. it will also be difficult getting that cash transferred to the seller's bank
- bonds and shares - they will drop if property does.

So what are the most liquid options that will enable you to access your funds quickly during a crisis? Perhaps diversification across everything, multiple bank accounts across different currencies, bitcoin, gold, another family member's offset account etc?

 

Split it across multiple banking institutions to get $250k guarantee from each one. Keep it in cash. Not enough time to do anything else with it that doesn’t risk your capital. Not sure what the 3month TD rates are atm but probably not much better than an at call HISA.

 

Thanks for the feedback!

 

I recently sold our PPOR too and have cash to park somewhere too. Will buy another property but not in the immediate future as I'm based abroad.
As an interim I've opened around 20 bank accounts to get both the honeymoon interest rates and the $250k protection. The honeymoon periods range from 4 to 6 months, some of the accounts require a monthly deposit to get the bonus rate. I've found HISAs better than any term deposit at the moment, the rates I'm getting vary between 2.65% and 1.25%. Check with each bank on their transfer limits - most have restrictions on how much you can transfer out each day, this could be a problem when you need to access the money. Having a $2k daily limit that can't be increased with a $100k deposit means it takes 50 days to get all you money out! Read the fine print on these HISAs regarding daily withdrawal limits.
I've just about run out of banks, so I'm looking for a better solution.
Would a bond based ETF like VAF be an option for some of the funds? It's yield is around 2.38% at the moment with not a lot of risk.

 

Bitcoins dude! Seriously not even kidding that much.