Skip to main content
Advertiser Disclosure
We do receive compensation from some partners whose offers appear on this page. We have not reviewed all available products or offers. Compensation may impact the order in which offers appear on page, but our editorial opinions and ratings are not influenced by compensation.

Ascent-logo

  • Credit Cards
  • Banking
  • Brokerages
  • Loans
  • Mortgages
  • Knowledge
  • Latest Picks
  • Search Icon Click here to search

Credit Cards

Top Picks
  • Best of March 2021
  • Cash Back
  • Balance Transfer
  • Travel
  • 0% APR
  • Rewards
  • Bad Credit
Knowledge
  • Beginners Guide to Credit Cards
  • How to Rebuild Your Credit
  • Maximize Your Credit Card Rewards
  • Learn More About Credit Cards
Credit Card Tools
  • Compare Cards
Looking for a new credit card?

Explore the best credit cards in every category as of March 2021.

Get started!

Banking

Top Picks
  • Best Savings Accounts
  • Best Bank Accounts
  • Best Money Market Accounts
  • Best CDs
  • Best Checking Account Bonuses
Knowledge
  • Beginners Guide to Banking
  • Everything You Need to Know About Savings
  • Money Market Accounts Made Easy
  • Learn More About Banking
Looking for a place to park your cash?

Check out our top picks of the best online savings accounts for March 2021.

Get Started!

Brokerages

Top Picks
  • Best Brokers of March 2021
  • Best Online Brokers for Beginners
  • Best Options Brokers
  • Best IRA Accounts
  • Best Roth IRA Accounts
  • Best Robo Advisors
Knowledge
  • How to Open a Brokerage Account
  • Beginner's Guide to Brokerages
  • Learn More About Brokerage
Just getting started?

Explore our picks of the best brokerage accounts for beginners for March 2021.

Get Started!

Loans

Top Picks
  • Best Loans of March 2021
  • Best Personal Loans for Bad Credit
  • Best Loans for Debt Consolidation
  • Best Low-Interest Personal Loans
  • Best Personal Loans for Good Credit
  • Best Personal Loans for Fair Credit
Knowledge
  • Personal Loans Made Easy
  • Debt Consolidation Guide
  • How to Pay Off Debt
  • Learn More About Loans
Thinking about taking out a loan?

Before you apply for a personal loan, here's what you need to know.

Get Started!

Mortgages

Top Picks
  • Best Mortgage Lenders of March 2021
  • Best Mortgage Lenders for Poor Credit
  • Best Refinance Lenders
  • Best VA Mortgage Lenders
Knowledge
  • First Time Homebuyers Guide
  • Home Loans Made Easy
  • The Complete Guide to Refinancing
  • How to Get a Mortgage with Bad Credit
  • Learn More About Mortgages
Tools & Calculators
  • Mortgage Calculator
Compare Rates
  • Today's Mortgage Rates
  • Refinance Rates
  • 15-Year Mortgage Rates
  • 20-Year Mortgage Rates
  • 30-Year Mortgage Rates
  • Jumbo Mortgage Rates
  • VA Loan Rates
  • 5/1 ARM Rates
  • 7/1 ARM Rates
  • FHA Mortgage Rates

Knowledge

Knowledge Section
  • All Articles
  • Credit Card Articles
  • Banking Articles
  • Brokerage Articles
  • Personal Loan Articles
  • Mortgage Articles
  • Personal Finance Articles
Recent Articles
  • FHFA Extends Multifamily Forbearance Through June 30: What It Means for Property Owners and Renters

    Mortgages

    FHFA Extends Multifamily Forbearance Through June 30: What It Means for Property Owners and Renters
  • Demand for These Jobs Has Plummeted -- and Won't Recover Any Time Soon

    Personal Finance

    Demand for These Jobs Has Plummeted -- and Won't Recover Any Time Soon
  • Stimulus Check Update: Senate Could Vote on Relief Bill This Weekend

    Personal Finance

    Stimulus Check Update: Senate Could Vote on Relief Bill This Weekend
  • My Husband and I Ditched Our Jobs for a Month to Travel. Here's How We Did It

    Personal Finance

    My Husband and I Ditched Our Jobs for a Month to Travel. Here's How We Did It
  • The Ascent
  • Knowledge
  • Banking

Maxed Out Your Emergency Fund? 3 Other Places to Put Your Money

by Maurie Backman | Jan. 18, 2021

The Ascent is reader-supported: we may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation.

Piggy bank surround by cash stacks

Image source: Getty Images

Here's where to stash your cash once your emergency fund is complete.

We're all supposed to have money set aside for a rainy day, and ideally, your emergency fund should contain enough cash to cover three to six months' worth of essential living expenses. That way, if you lose your job or get hit with an unplanned bill, like a sudden home or car repair, you'll have funds to tap and won't get stuck racking up costly debt to cover that expense.

But what happens if your emergency fund is complete and you have extra money to save? To be clear, this is a very good problem to have. Here are some options you can look at if you're set on emergency savings but want to keep socking away cash.

1. Open a certificate of deposit (CD)

Today's CD rates aren't much to write home about. But when interest rates are higher, CDs can be quite lucrative given their risk-free nature. With a CD, the money you put into the bank is FDIC-insured (up to $250,000 per depositor), so you won't have to worry about losing principal. And in exchange for locking your money away for the duration of your CD, you'll enjoy a higher interest rate than what a savings account will pay.

Of course, there is the risk that you'll be penalized if you close out your CD before its term is up -- to the tune of several months' interest. But if you already have a fully-loaded emergency fund, that's less likely to happen since you can tap your emergency fund before having to cash out your CD.

2. Fund an IRA or 401(k)

Saving for near-term emergencies should take priority over funding a retirement plan. But once you're all set with the former, it pays to focus on the latter. You'll need savings of your own to cover your living expenses in retirement -- don't be fooled into thinking Social Security will be enough. The sooner you start setting money aside for your senior years, the more opportunity your money will have to grow.

You have several options when it comes to saving for retirement. You can sign up for your employer's 401(k) plan if it offers one, or you can open an IRA on your own. With an IRA, you generally get more options for investing your money than with a 401(k), and some IRAs offer an automatic transfer feature so you can put a portion of each paycheck into your account before you get a chance to spend it.

3. Open a brokerage account

With an IRA or 401(k), you can invest for the future and enjoy tax benefits in the process. But for both of these account types, you can't access your money until age 59½ without facing costly penalties. While it's important to sock away funds for retirement, you may also want to look at opening a brokerage account and investing some of your money there.

With a traditional brokerage account, there's no tax benefit at hand, and there's no protection of principal like you'll get with a CD. But, you'll have an opportunity to grow your money and you'll have the option to access it any time without penalty.

What's the right home for your extra cash?

Having a solid emergency fund is a great thing. But once you're comfortable with the amount of money you have set aside for unplanned expenses or an extended period of unemployment, it pays to find a good home for the rest of your money.

Sure, you could keep stashing it in a regular savings account. But if you do, you'll limit your money's ability to grow, since savings accounts, even in the best of times, aren't known to pay much in interest. Rather than limit yourself, look into a CD, retirement plan, or brokerage account for your extra cash. Or, divvy up your money among all three options. Doing so could help you meet different goals at varying stages of life.

These savings accounts are FDIC insured and can earn you 12x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you more than 12x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2021.

Two top online savings account picks

Rates as of Feb. 15, 2021 Ratings Methodology
Logo for CIT Bank Savings Builder
Logo for American Express® High Yield Savings Account
CIT Bank Savings Builder American Express® High Yield Savings Account
Member, FDIC Member, FDIC
Rating image, 5.0 out of 5 stars.
5.0 stars
ToolTip Icon for Star Rating. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. = Best
= Excellent
= Good
= Fair
= Poor
Rating image, 5.0 out of 5 stars.
5.0 stars
ToolTip Icon for Star Rating. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. = Best
= Excellent
= Good
= Fair
= Poor
Open Account

On CIT's Secure Website.

Open Account

On American Express' Secure Website.

Read Review Read Review

APY: Up to 0.40%

APY: 0.50%

Best For: No monthly maintenance fee

Best For: High APY

Min. to earn APY: $25k or $100 monthly deposit for highest tier

Min. to earn APY: $0

About the Author

Maurie Backman
Maurie Backman icon-button-linkedin-2x

Maurie Backman is a personal finance writer who covers everything from savings to retirement to healthcare. Her articles have appeared broadly on major outlets such as CNBC, MSN, and Yahoo.

Share This Page
Facebook Icon This icon shares the page you are on via Facebook
Blue Twitter Icon Share this website with Twitter
LinkedIn Icon This image links to share the page over LinkedIn.
Email Icon Share this website with email

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.

The Ascent is reader-supported: we may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation.

Featured Offer

Amex_Savings_BlueBox_Double_Line_226x142.png

High APY and low fees

Open Account

Related Articles

Piggy bank surround by cash stacks image for Best Online Savings Accounts for 2021

Best Online Savings Accounts for 2021

Interest spelled out on a calculator image for Best CD Rates

Best CD Rates

Man holding credit card and looking at computer screen laughing with woman image for What is APY and What Does it Mean for Your Savings Account?

What is APY and What Does it Mean for Your Savings Account?

Couple looking at a paper bill together at a table worried image for Is it Time to Switch Banks?

Is it Time to Switch Banks?

Featured Articles

Best Online Savings Accounts for 2021

Best CD Rates

What is APY and What Does it Mean for Your Savings Account?

Is it Time to Switch Banks?


The Ascent Logo

The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.

btn_facebook-yellow btn_twitter-yellow btn_instagram-yellow

Copyright © 2018 - 2021 The Ascent. All rights reserved.

About The Ascent
About Us Contact Us Newsroom How We Make Money Editorial Integrity Ratings Methodology
Legal
Terms of Use Privacy Policy Accessibility Policy Terms and Conditions Copyright, Trademark and Patent Information
Learn
Credit Cards Banking Brokerage Loans Recent Articles

By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.

Back to The Motley Fool