What's the safest place to park cash now?

Anything insured by the government (FDIC insured) is considered very safe, up to the insured amount. Some accounts are FDIC insured up to $250,000 per depositor, per bank, per account type. You can check if your bank offers FDIC insurance on the FDIC government website.

Where should you keep large amounts of cash?

To ensure your big cash stockpile is safe and growing, you can do a couple things: Spread cash among FDIC-insured banks and bank accounts. Diversify investments into stocks, bonds, and savings accounts to grow your stockpile. Keep cash you may need tomorrow in a checking account or somewhere easily accessible.

Where to Park Your Cash | The Motley Fool

You have a lot of choices for where to park your cash, but you shouldn't just toss it in the first account you come across. Take your time. Shop around. Remember, what's right for your neighbor may not be right for you. But everyone's gotta start somewhere. This guide will make the comparison easy.

What to consider when choosing where to park your cash

Find the right place to keep your money by focusing on the following:

Access: Think about how often you'll need to withdraw your funds and which withdrawal methods (online transfer, check writing, ATM card, etc.) are most convenient for you.
Interest: Some types of accounts give you more money for keeping your cash there, but higher rates often come with a tradeoff: less access. Accounts may also have minimum balance requirements you must meet to earn interest.
Service: Some are comfortable managing their money online, while others appreciate being able to get assistance in-person.
Penalties: Some bank accounts charge you penalties for withdrawing your cash before specific dates, which can shrink how much interest you earn.

When deciding where to park your cash, consider the following major account types.

Savings accounts

A high-yield savings account is designed to hold money you plan to spend within the next few years or for your emergency fund. Some accounts limit you to six free withdrawals per month (per Regulation D) and you probably won't get an ATM card or check-writing capabilities, but you can earn interest on your account.

Just as with checking account funds, cash you keep in a savings account is backed by the FDIC. This makes it a safer bet than investing your money for those who are worried about losing it.

Account minimums are usually low, but if you choose a brick-and-mortar bank, your interest rate will likely be low as well. However, some offer better rates to customers who keep lots of cash in their account or open multiple accounts at the same bank.

Compare savings rates

Make sure you're getting the best account for you by comparing savings rates and promotions. Here are some of our favorite high-yield savings accounts to consider.

Account	APY	Promotion	Next Steps
Open Account for SoFi Checking and Savings On SoFi's Secure Website. Member FDIC. Rating image, 4.50 out of 5 stars. 4.50/5 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.	up to 4.50%² Rate info Min. to earn: $0	New customers can earn up to a $300 bonus with qualifying direct deposits!¹	Open Account for SoFi Checking and Savings On SoFi's Secure Website.
Open Account for CIT Platinum Savings On CIT's Secure Website. Member FDIC. Rating image, 4.50 out of 5 stars. 4.50/5 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.	4.85% APY for balances of $5,000 or more Rate info Min. to earn: $100 to open account, $5,000 for max APY	N/A	Open Account for CIT Platinum Savings On CIT's Secure Website.
Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC. Rating image, 4.50 out of 5 stars. 4.50/5 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.	4.25% Rate info Min. to earn: $0	N/A	Open Account for Capital One 360 Performance Savings On Capital One's Secure Website.

Checking accounts

Checking accounts are designed for daily spending. They keep your money easily accessible, and most include check-writing capabilities, debit cards, and online access. If you choose a brick-and-mortar bank or credit union, you can also visit a branch to deposit or withdraw money.

Checking accounts don't usually offer interest and when they do, it's not as high as what you can get with most other account types. Some checking accounts even charge fees, which could cost you money if you're unable to waive them.

Money you put in a checking account is backed by the Federal Deposit Insurance Corporation (FDIC), so it's protected up to $250,000 per person per bank in the event of bank failure.

Read More: Safest Banks in the U.S.

Compare checking accounts

We recommend comparing checking accounts to make sure you're getting the best fit for you. Here's a list of our favorite accounts.

Account	APY	Promotion	Next Steps
Open Account for Chase Total Checking® On Chase's Secure Website. Member FDIC. Rating image, 3.50 out of 5 stars. 3.50/5 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.	0% Min. to earn:	N/A	Open Account for Chase Total Checking® On Chase's Secure Website.
Open Account for Discover® Cashback Debit On Discover Bank's Secure Website. Member FDIC. Rating image, 5.00 out of 5 stars. 5.00/5 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.	0% Min. to earn: N/A	Earn 1% cash back on up to $3,000 in debit card purchases each month (see details when you click 'Open Account')	Open Account for Discover® Cashback Debit On Discover Bank's Secure Website.
Open Account for Quontic High Interest Checking On Quontic's Secure Website. Member FDIC. Rating image, 4.00 out of 5 stars. 4.00/5 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.	up to 1.10% Min. to earn: $1	High APY when you complete 10 or more qualifying debit card purchases each month	Open Account for Quontic High Interest Checking On Quontic's Secure Website.

High-yield bank accounts

High-yield bank accounts are usually offered by online banks. They don't have branches to maintain, so they can offer customers better rates and fewer fees. Most online banks offer checking and savings accounts, and these are backed by the FDIC.

Accessing cash can be a bit of a pain if your account doesn't include an ATM card and a fee-free ATM network. You'll have to transfer funds between accounts -- and possibly between banks-- but it is doable. Big brick-and-mortar banks often offer large ATM networks.

Money market deposit accounts

Money market accounts are a hybrid of checking and savings accounts. They usually offer higher rates than savings accounts, plus multiple ways to access cash (like checking accounts do). But you're limited to six free withdrawals per month.

Money market accounts are a little less common than checking or savings accounts and they often have higher minimum deposit requirements. But if you can meet these requirements, you'll earn a decent interest rate, plus the security of FDIC insurance.

Money market funds

Money market funds are offered by brokers and mutual fund companies. These funds invest in highly liquid securities like certificates of deposit (CDs) and government securities, discussed below.

Your money isn't FDIC insured if you choose a money market fund, but you'll still have quick access to your cash when you need it via an ATM card or a check. You may also be able to earn a greater return on your savings than you could with any of the accounts listed above.

Certificates of deposit (CDs)

Certificates of deposit (CDs) are another type of FDIC-insured bank account that offers a high annual percentage yield (APY) in exchange for locking up your funds. CDs have terms, usually ranging from about six months to five years. When you open one, you're agreeing not to touch your cash for the term in exchange for a high interest rate.

If you withdraw your funds before the maturity date, you'll pay a penalty. The penalty amount depends on your CD and when you make the withdrawal. That makes these accounts a poor choice for anyone who thinks they may have to cash out early.

Rates as of Sept. 12, 2024


Bank & CD Offer	APY	Term	Min. Deposit	Next Steps
Discover® Bank CD Member FDIC.	APY: 4.50%	Term: 1 Year	Min. Deposit: $2,500	Open Account for Discover® Bank CD On Discover Bank's Secure Website.
LendingClub CD Member FDIC.	APY: 5.10%	Term: 10 Months	Min. Deposit: $2,500	Open Account for On Secure Website.
Quontic CD Member FDIC.	APY: 5.10%	Term: 6 Months	Min. Deposit: $500	Open Account for On Secure Website.

U.S. government bills or notes

Treasuries are backed by the full faith and credit of the U.S. government. Treasury bills typically mature in less than a year, while Treasury notes often take between two and 10 years to mature. They're considered extremely safe, and you can buy them commission-free online. They're also exempt from state and local taxes.

But you may be able to earn a higher return with some of the other options listed here. Also, like most bonds, if you need to withdraw your funds before the maturity date, you may not get your full investment back.

I bonds

I bonds are a special type of bond that's designed to protect your investment against inflation. You can purchase them in increments ranging from $50 to $10,000 and buy them directly online without paying a commission fee.

An I bond is also exempt from state and local taxes and might be tax-free if you use the money for post-secondary education expenses. If you do owe taxes on your earnings, you may defer them for up to 30 years. But you must make sure to hold your I bond for at least five years. Selling it earlier results in a penalty.

Municipal bonds

Municipal bonds are issued by state and local governments. Like all bonds, they're essentially debt. The governments take this money to use on public works and pay you back with interest. While they're not as safe as U.S. government bonds, municipal bonds are still considered low risk, and they're exempt from federal taxes (and possibly state and local taxes).

Unlike U.S. government securities, municipal bonds may charge a commission fee. You also may not earn as much with these as you could with some of the other options on this list, especially if you sell your bond before its maturity date.

Corporate bonds

Corporate bonds are debts issued by companies. Bonds from more creditworthy companies are generally considered safer, but you may earn smaller returns. Meanwhile, bonds from less creditworthy companies could earn you bigger returns, though there's a greater risk of loss.

You'll likely have to pay a commission to purchase a corporate bond, and selling yours early could cost you money.

Bond funds

Bond funds are mutual funds that pool the money of many investors to purchase a variety of bonds. They help you quickly diversify your investments, which can better protect you against loss. But they're a little less predictable than some of the other investments listed here because the share price and yield can fluctuate.

Mutual funds also charge an annual fee known as an expense ratio, which eats up some of your profits. You may pay a commission fee, known as a load, as well.

You don't have to choose just one

You're free to spread your cash out over several accounts detailed above. Remember, what's right for you now may not be right for you later on, so periodically review where to park your cash. Compare the fees and returns at different types of bank accounts or investments, as these can change over time.

The Ascent's best savings accounts

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 top savings account picks can earn you more than 10x the national average savings account rate.

Best Savings Accounts

FAQs

Anything insured by the government (FDIC insured) is considered very safe, up to the insured amount. Some accounts are FDIC insured up to $250,000 per depositor, per bank, per account type. You can check if your bank offers FDIC insurance on the FDIC government website.
To ensure your big cash stockpile is safe and growing, you can do a couple things:
- Spread cash among FDIC-insured banks and bank accounts.
- Diversify investments into stocks, bonds, and savings accounts to grow your stockpile.
Keep cash you may need tomorrow in a checking account or somewhere easily accessible.

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Where to Park Your Cash