Where Can You Stash Your Cash?

Patrick Cote |

BY: SUSAN POWERS, CFA, CPA, CFP®, CPFA®

Are you looking to invest money for the short term?  If so, you are probably wondering - where are the best places to safely stash that cash?  With rates rising from 0% to 4% or more in 2022, it now pays to find the best options for your cash.

Are you retired?  Keeping a cash reserve to cover 12-24 months of living expenses can provide peace of mind during periods of market volatility.

Saving for a house?  Having the cash on hand gives you the flexibility to act when the time is right!

What are your options?

  • Bank high-yield savings and money market accounts are now offering more competitive yields and are backed by the FDIC.
  • Money market funds – also known as money market mutual funds – are offered by banks, brokerages, and mutual fund companies.  They invest in short-term securities, including treasuries, municipal and corporate debt.
  • Treasuries are backed by the AAA credit rating of the U.S. federal government.
    • Treasury bills - T-bills have a maturity of up to a year.  They are purchased at a discount.  The difference between the discount and the face value at maturity is your interest payment.
    • Treasury notes - T-notes, are issued with maturities of two, three, five, seven and 10 years. They pay interest every six months and return their face value at maturity.
  • Certificates of Deposit – Bank CDs pay a stated amount of interest for a specified period and maturity date.

We are here to help!  Short-term investments minimize risk but do so at the cost of potentially higher returns available in long-term investments such as equities and longer-term fixed income investments.  Call us today to discuss your options.