The 7 Best Places to Put Your Cash in September 2022

If you have extra cash to put to work, here are some of the best options right now.

If you have extra cash on the sidelines, it's certainly a good problem to have, but it's still a problem. Cash that sits idle in a savings account at virtually no interest (or worse, physical cash sitting in your wallet or desk drawer) is a nice financial buffer but doesn't do anything to add to your future wealth.

With that in mind, here are seven things in no particular order that you could consider doing with your excess cash as we head into the fall season.

1. CDs

Interest rates have risen considerably in 2022, and it could be a great time to lock in an interest rate on a CD. Some of our favorite banks are currently offering 1-year CD rates in excess of 2.5%, and if you're willing to commit to a longer time period, your APY could be even better.

2. High-yield savings accounts

If you want a better yield on your savings than your local bank is willing to pay, but you also don't want to lock your money up for any specific length of time, an online-based high-yield savings account could be worth a look. Thanks to the rising-rate environment, several of the most reputable accounts pay APYs of 2% or more.

3. I bonds

Series I savings bonds, also known as inflation-protected bonds or simply “I bonds,” have interest rates tied to inflation that are designed to preserve your purchasing power over time. And thanks to the high inflation rate in 2022, new I bonds have an initial interest rate of 9.62%. This rate applies for the first six months, and will adjust to then-current inflation rates, but this can be a great place for money you want to save, but without letting inflation erode the value of your savings account.

4. Start a brokerage account

Have you been thinking of investing in stocks, mutual funds, or ETFs, but haven't started yet? With the market down significantly in 2022, it could be a great time to get started. So, one excellent way to put cash to work in September is to start a new brokerage account.

5. Invest for your retirement

Based on the stock market's historical rate of return, a $1,000 addition to your IRA or 401(k) made at age 30 could grow into an additional $28,000 of retirement savings by the time you reach age 65. And the math works out nicely at other ages as well. So, if you're sitting on some extra cash and want to give yourself a bit more financial security later in life, increasing your retirement contributions could be a smart way to go.

6. Save for college

If you have children (or nieces, nephews, grandchildren, etc.) it could be a smart idea to contribute to a 529 Savings Plan to invest and save for college expenses, or to open a new account if you haven't done so yet. 529 plans are run by each individual state, and depending on where you live, you might be able to get some nice state tax benefits for contributing.

7. Pay down high-interest debt

If you have credit card debt, or other forms of high-interest debt, using your extra cash to pay it down can give you the best return on investment available anywhere. Think of it this way – if you have credit card debt at 18% interest and an investment account that generates 8%-10% annualized returns, you're actually setting yourself up to lose money over time. And if you can't pay it off, it could be worth considering a balance transfer to a card with a 0% intro APR.

Which is best for you?

It's important to emphasize that I'm not saying you should do any of these things with your money. Obviously, things like saving for college expenses don't apply to everyone reading this, and other options, like CDs, aren't right for many people either. The takeaway here is that there are quite a few options when it comes to putting your cash to work, but the best choice(s) are dependent on which makes the most sense for your personal situation.