Why $50K in Savings Is Probably Too Much

Keeping tens of thousands in the bank isn't necessarily a bad thing. First, it means you're (probably) financially stable. Second, it means you can be flexible in times of emergency.

But if you've got, say, $50,000 in your standard savings account, you might want to ask: Could your money be working harder for you elsewhere?

The answer: Yes. Here's what to do when you've got a ton of excess cash in savings.

Earn more by moving your money

There's no shortage of places to invest your money -- so many, in fact, that it's hard to know where to start. Here are three of my favorite options.

1. Certificates of deposit (CDs)

CDs allow you to lock up your money for a given period of time -- months or years -- and offer a fixed return in exchange. With interest rates on the decline, now's a great time to lock in a high APY while you still can. See what the best CD rates are looking like today to get started.

2. Individual retirement accounts (IRAs)

IRAs are retirement 101. They're an investment tool with powerful tax advantages -- they're exempt from capital gains and dividends taxes, which can mean a ton of savings over the years. Plus, anyone with an income can open one. Check out our list of the best IRAs to start saving now.

3. Brokerage accounts

Finally, brokerage accounts let you invest in stocks, bonds, mutual funds, and more. They don't offer the tax breaks of an IRA, but they have fewer limitations -- anyone can open one, and you can withdraw money at any time without penalty. To learn more, see our list of our favorite brokerage accounts today.

Should you hold on to more cash?

As mentioned, holding on to a ton of cash is a smart idea -- especially if you're saving up for an upcoming purchase or bracing for an emergency.

Otherwise, consider keeping an "emergency fund" of three to six months' worth of expenses and investing the rest. It won't be quite as easy to take money out of your brokerage account, for example, but that's always an option too if you need to do it.

Finally: For the cash you do need easy access to, make sure you're keeping it in a high-yield savings account (HYSA). Right now, the best HYSAs are offering APYs of 3.30% or higher, making them the perfect place to stash your emergency fund.

And just like traditional savings accounts, your money's FDIC-insured up to $250,000, so you're still totally protected.

Want to earn more on your savings today? See our full list of the best high-yield savings accounts available now.