Maximizing Cash Savings in Changing Economy

High-Yield Savings Accounts

With the Fed expected to cut interest rates this year, it's crucial to make the most of your cash savings. One attractive option is FDIC-insured high-yield savings accounts at online banks, which often pay much more than brick-and-mortar bank savings accounts. Rates this month have been as high as 4.44%, well above the 0.56% national average.

Money Market Accounts

Money market accounts, which typically require higher minimum deposits, have been offering rates of between 3.8% and 4.3%. These funds invest primarily in shorter-term government securities, making them a very low-risk way to get better yields.

No-Penalty Certificate of Deposit

For more flexibility, consider a no-penalty certificate of deposit from an online FDIC-insured bank. Top rates on no-penalty CDs with terms of six months to a year range between 4.30% and 4.45%.

Investments in Treasuries and Municipal Bonds

For money you’ll need within a year or two, or within three to five years, you might consider some select investments in Treasuries and municipal bonds, bond mutual fund or a bond exchange-traded fund.

TIPS (Inflation-Protected Securities)

For time frames of five-plus years, a TIPS can be a good alternative to a CD. They will likely do better than CDs if high inflation becomes a problem.