by Christy Bieber | April 16, 2020
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. Terms may apply to offers listed on this page.
Putting your money into a high-yield savings account could be the right choice for three reasons.
Thanks to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, most Americans have already received a lump-sum payment from the government or will have money mailed to them by June. The size of your stimulus check depends on your income and marital status, but payments are worth up to $1,200 per adult and $500 for each dependent child under 17.
If you're one of the many people receiving this money, you'll have to decide what to do with it. One of the best options could be to invest it in a high-yield savings account.
Putting your stimulus funds into a high-yield savings account makes sense for three primary reasons:
As you can see, there are a few really good reasons to invest your stimulus funds in a high-yield savings account. But that doesn't mean this is the right choice for everyone. In fact, there are a few situations in which doing something else with your money would likely be smarter. You should think about using the money a different way if either of the following are true:
If you've already spent, saved, or invested your current stimulus check, the good news is that there's a chance you'll receive another one.
There are multiple proposals on the table to provide Americans with additional funds, including:
While these stimulus check bills have received some support and the HEROES Act has even passed the House, the U.S. Senate is unlikely to act quickly on adopting any of them. The Senate Majority Leader, Mitch McConnell, has urged more time before additional stimulus funds are made available. And the Senate does not plan to consider additional funding until June, even as the Trump Administration has suggested more direct payments may be needed for American households.
If you do receive a second stimulus check, you may decide to use it differently than your first. If your first check paid the bills, for example, a subsequent stimulus payment could potentially be available to invest in a high-yield savings account for emergencies.
Putting your stimulus check into a high-yield savings account provides a good balance between risk and reward because you can earn a reasonable return on your money without putting it at risk or tying it up so you can't get it easily if you need it. You can check out our guide to the best high-yield savings accounts to find a bank that's offering a good ROI and open an account today. Once you've opened your account you can move your current stimulus payment into it if you've already received it and be ready to deposit any future stimulus money that comes your way.
Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. The Ascent's 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 The Ascent's shortlist of the best savings accounts for 2021.
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 a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2021 The Ascent. All rights reserved.