0.5-10 Year Account?

[daylen]

I currently use a credit union checking account for near term (never holds more than 6 months worth of expenses), and I have a long term IRA. So what type of account should I use for the in-between?

My current line of thinking is to open a savings account with an online bank since they usually offer better rates on CD's. Physical locations and ease of withdrawal wouldn't be important for a mid-term account anyway.

What form of account do you use to hold and invest money that you will want to use in 0.5-10 years?

[IlliniDave]

I have a taxable investing account where I keep everything above ~3 mos expenses. I have about two years bare bones expenses in a MM and intermediate-term muni bonds. Everything else there is invested per my overall asset mix. Including a Roth IRA, I have about 6 years at my current spending level in the account(s) altogether. It gets the bulk of my saving/investing contributions these days and I'm hoping to have 10 years or a little more in 2 years when I check out of the corporate world.

[classical_Liberal]

...

[Dragline]

For monies I actually expect to spend in the next three to five years, its mostly bond funds (split between regular and inflation-protected) and cash/savings accounts. But for stuff I am not actually anticipating spending, I would put in a regular taxable investment account.

Also, one of the more emotionally useful calculators at www.portfoliocharts.com is the one that reveals maximum drawdowns in both percentages and years or selected portfolios. I purposefully model off ones that minimize the maximum historical drawdown time to only a few years. This is one of the first thing I look at when somebody says, "What do you think about investing in X, Y and Z?"

[George the original one]

I've got about 1.5 years of expenses sitting in cash in the brokerage account right now. Letting it sit there is comfortable for me because it's available for investing opportunities(*) and I can move it to a checking account in a day or have a physical check in a week (barring any unanticipated freeze of accounts). We typically have 3-6 months expenses sitting in checking accounts.

(*) Usually these are short term capital gain opportunities offering 2x CD rates, but can include moving long term investments. For instance, earlier this year, I bought & sold gold for a 7% gain... should have held onto the gold, but the short term gain met my goal.