What are your thoughts on using covered call ETF’s QYLD, NUSI, JEPI, etc as a place to park your savings? They offer an attractive yield above any standard or even high yield savings accounts so it sounds like a no brainer. The yield on your savings account will never outpace inflation (especially now) so you constantly have a depreciating asset if you kept your money in a savings account.
I know people will automatically comment that funds like QYLD “always is depreciating” in value but the fund is only down $3 and change over 5 years on average. Honestly I could live with that. Say I have $10,000 for easy math in QYLD (obviously this would be split amongst other income ETF’s) and was purchased at $23 five years ago. If I just held, the overall value would be ~$8600 but I would have returned ~$5000 in payouts if I assumed an constant payout of $0.20 per share (this doesn’t assume DRIP) Again, these are obviously assumptions and please check my math but I feel like in theory this is sound. A typical savings account would return 1% at best so that would yield in 5 years is ~$10,500.
Disclaimer: This is not something I do as I currently have a 3 month emergency parked in my standard savings account. This is just an idea I’ve been thinking about.
Leave a Reply