4 Low-Risk Places To Keep Cash While Earning Interest
If you have reached a certain point in your career, you may have a little bit of extra money set aside. While you know that storing your savings in the freezer isn't the best idea, you may not be sure where to keep it in order to get the biggest bang for your buck.
Financial experts agree that choosing the right place for your money is crucial for protecting your wealth and earning a solid return. Here are four of the safest places to keep your savings and ensure your money works for you.
Explore More: 3 Money Rules for Beginners That Actually Add Up to Real Wealth
Check Out: Start Growing Your Net Worth With Smarter Tracking
High-Yield Savings Account
Across the board, most money experts would tell you a high-yield savings account is one of the best ways to keep your money safe. These types of accounts offer higher interest rates than traditional savings accounts and are FDIC-insured, which means the government will protect your money up to $250,000.
Plus, many high-yield savings accounts offer bonus interest rates on deposits that stay in the account for a certain length of time. Nothing like a little motivation for you to save and watch your money grow even when it isn't actively being used.
Certificate of Deposit (CD)
If you have extra money that you won't need in the next few months, a certificate of deposit can be a great option for reliable earnings, especially right now with interest rates soaring. You have the benefit of the rate being locked in, which means you are guaranteed that interest rate through the length of your CD term.
Simply put, no matter what the rate environment looks like over the course of that term, whether six months or five years, you're still going to earn the rate you did when the account was opened. If you don't want to be tempted to spend your savings, CDs are a great and safe option to ward off impulse spending while simultaneously being rewarded with high interest returns at the end of your account term.
Money Market Account
Money market accounts are a type of savings account that offers a higher interest rate than traditional savings accounts and can be a good option for keeping your savings safe. This is because this type of savings product has higher minimum balance requirements than other savings accounts, and they may also have limited check-writing capabilities.
If you are looking for more flexibility than a traditional savings account, consider this hybrid of sorts that gives you check-writing and debit card privileges. Plus, like other traditional savings accounts, these are also FDIC-insured.
Treasury Securities
U.S. Treasury securities such as Treasury bills, notes and bonds are considered to be among the safest investments because they are backed by the full faith and credit of the U.S. government, even in this economy. Though often lauded as a very safe investment, keep in mind that they do not offer a high rate of return, as they are meant to be a low-risk investment.
Crystal Mayer contributed to the reporting for this article.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion: