Don't Keep Cash at Home. Here Are 3 Dead Simple Places to Put It Instead
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Keeping cash in a drawer feels safe, until you realize inflation eats away at your buying power and if your house ever got broken into or damaged, that money's gone for good. And it's definitely not earning you anything.
You don't need to go full investor to be smarter with your money. A simple three-part setup can keep your money accessible, protected, and earning more than dust.
1. High-yield savings for near-term needs
Start with a high-yield savings account for anything you might need in the next few months.
Rates around 4.00% to 4.50% APY are common right now, and that's generally more than 10 times the national average savings rate. Your cash stays FDIC-insured and ready for emergencies.
Think of it as your "sleep-well-at-night" fund. Easy to reach, hard to regret.
Compare some of the best high-yield savings accounts available today.
2. Short-term CDs or Treasuries for mid-term goals
Next, set aside money you won't need right away, like for a vacation, new car, or home project, in short-term CDs or Treasury bills.
Both are safe and predictable. CDs are FDIC-insured, and Treasuries are backed by the U.S. government. You can lock in rates for a few months to a year and know exactly what you'll earn.
It's a steady way to earn more than a savings account without taking on real risk. See some of the best CD accounts here.
3. Index fund investing for long-term growth
Finally, once your short-term needs are covered, put the rest where it can grow.
Low-cost index funds or ETFs let your money ride the long-term gains of the stock market. Historically, a broad market fund like the S&P 500 has earned around 10% a year.
That kind of growth is how you outpace rising prices and build real wealth over time.
Compare top online brokers with low fees and simple investing tools.
Simple can be smart
You don't need a vault or a stock-trading app to be smart with cash. Just give each dollar a job: savings for near-term needs, CDs or Treasuries for mid-term goals, and investing for the future.
That's how you stay safe, earn more, and finally stop worrying about the envelope in your nightstand.
Our Research Expert
Jake FitzGerald is a full-time Editorial Strategist and Personal Finance Writer at Motley Fool Money, leading content production and distribution while also writing about credit cards, bank accounts, and other financial products. He has more than a decade of experience editing and shaping financial content to give readers clear, trustworthy money advice. His work focuses on delivering practical insights that empower people to make smarter financial decisions. Off the clock, he’s a fan of college football tailgates and still loyal to his favorite putter -- despite what his short game suggests.