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Where to Stash Your Cash Now

Earn 5 percent or more on your idle cash — safely


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Want to make a few hundred bucks or more for an hour of your time? If you have some cash sitting at the big bank paying you nothing, here are a few ideas to take advantage of surging interest rates. Rates are as of June 10, 2024, with the amounts they translate to in annual interest for each $10,000 invested.

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1. High-paying money market accounts

These are great options if you want to earn more but also want immediate access to your cash, such as by writing a check. Money market accounts come in two types: those issued by banks or credit unions and those from investment companies such as Fidelity, Schwab and Vanguard. Both come with limited check writing so you’ll have immediate access to your cash.

The best rates on such accounts at banks and credit unions can be found on sites such as DepositAccounts.com and Bankrate.com. The highest annualized money market rate on DepositAccounts.com was 5.35 percent; on a $10,000 deposit, that equates to $535 a year in interest. These deposits are guaranteed to at least $250,000 per institution by the Federal Deposit Insurance Corp. (FDIC) or National Credit Union Association (NCUA).

Brokerage firms and mutual fund companies also have money market mutual funds, which are not insured by the federal government. You want to make sure you have a federal money market fund that invests in securities issued by the U.S. Treasury or an agency of the U.S. government. Otherwise, you could lose some of your principal or find out you can’t get your money back for a while. Don’t settle for a low rate — you should shoot for at least a 4 percent annual yield.

2. High-yield savings accounts

These accounts at banks and credit unions are also backed by the FDIC or NCUA. They are like bank money market accounts except that you don’t have check-writing privileges. Because of that, they typically pay a bit more than money market accounts. Using the same two websites noted for money market accounts, the top yield on June 10 was 5.55 percent, so that amounts to interest of $555 a year on $10,000. 

I set up my high-yield savings account to get quick access in two ways. First, I link it to my checking account so I can do a free online transfer known as an ACH transfer, which takes a week or less. To get immediate access, I keep a very small money market account at the same bank that allows me to instantaneously transfer funds from my savings account so I can immediately write a check. Because it’s the same institution, there is no delay or hold put on the money.

3. Certificates of deposit (CDs)

A CD is a deposit at a bank or credit union that earns interest on a lump sum for a fixed period. You typically must leave it for that agreed-upon period of time or you will be charged a penalty. According to DepositAccounts.com and Bankrate.com, the highest yielding one-year CD is paying 5.3 percent or about $530 per $10,000. The same insurance limits apply to CDs as to any other bank account.

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4. U.S. Treasury bills

The only thing safer than money backed by the FDIC or NCUA is money directly backed by the U.S. Treasury and there is no $250,000 per institution limit. These are like CDs, only they can be sold in the open market. They are also state-tax exempt, meaning you only have to pay federal taxes on the interest. Short-term rates happen to be higher than long-term rates right now. A one-year Treasury is yielding 5.1 percent, or $510 a year for each $10,000. If you live in a high tax state, this could yield even more than a CD after taxes, because Treasury bill interest is free from state and local taxes.

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These can be bought through most financial institutions, including investment firms such as Fidelity, Schwab and Vanguard. They can also be purchased at banks or from the U.S. government through TreasuryDirect.gov.

5. Treasury Inflation Protected Securities (TIPS)

While any of the above four places to stash cash are attractive compared with low- or no-yield accounts, we don’t know if they will earn more than the rate of inflation, which we all painfully know was high last year. TIPS are similar to I bonds only better right now, as I recently wrote. They pay a fixed amount plus inflation, measured by the consumer price index (CPI). Like Treasury bills, they are backed by the U.S. government, interest is exempt from state taxes, and you can sell them in the open market if you don’t want to wait until they mature. You can buy them at the same places you buy Treasury bills.

The shortest period the U.S. government issues TIPS for is five years. But you can buy TIPS from someone else through a brokerage, such as those mentioned earlier. Recently, TIPS that matured in one year yielded 1.56 percent, plus inflation. That equates to $156 plus whatever inflation turns out to be for each $10,000 invested.

When I ask someone if I can buy an hour of their time for $200, I typically get an enthusiastic positive response. Well, many of those same people could earn thousands of dollars more for that hour of their time. Perhaps you can as well. After you stash your cash in something safe and high yielding, give yourself a reward. For example, if you make an extra $1,000 that first year, take half and treat yourself to something you want with that extra cash. You deserve it.

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