[USER]

What would be the reason to use a taxable brokerage account vs HYSA? I have about 100k I am looking to have access to if needed but make money off it in the mean time.

What are the key advantages and trade-offs in terms of returns, taxes, liquidity, and risk?

I’d love to hear different perspectives on when a taxable brokerage makes more sense than keeping the money in an HYSA.

[Will]

Greater growth potential.
Better tax rate on earnings.
That long-term capital gains rate works wonders.

And….the bank is basically doing this with your money anyhow, but because they have oodles more money, they cut you in for a few shekels while keeping the lion’s share for their own purposes.

Making loans to people vs making loans to businesses….not exactly the same, but similar.

So, risk it for the biscuit, or learn to live with less.

[Rhonda]

Taxable brokerage gives you the opportunity to invest in mutual funds or etfs or stocks, with the growth (and risk) associated with those.

HYSA is usually just that, a savings, not an investment account at all.

No risk in an HYSA as it should be fully FDIC insured, but growth opportunity is smaller.

[Berry]

I use a brokerage account and I get a better yield with that money market fund than a HYSA

[Author]

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