Like high-yield savings accounts, they likely have restrictions such as limited check writing privileges (over certain minimums) while generally providing higher yields than a checking account. ![]() Money market account-Institutions are able to offer relatively high interest rates on these accounts by investing your money in high-quality, short-term debt.To get the highest return you may also have to maintain a relatively high minimum balance. These usually pay more interest than checking accounts but there may be restrictions such as limited withdrawals and debit-card transactions. Savings account-This is probably the category with the widest variation in features and yield, so doing some comparison shopping is well worth your time.Interest-bearing checking account-This is your working horse for everyday needs, allowing you to write checks and have easy ATM and debit-card access to your cash.The National Credit Union Administration ( NCUA) insures checking and savings accounts at credit unions up to the same limits. The following are all insured by the FDIC up to $250,000 per account holder, per bank, per ownership category and therefore very safe. However, it still makes sense to try to get the biggest bang for your buck. The goal of the following accounts is not to make a huge return, but to help you pay for day-to-day or emergency expenses. Let's take a look.Ĭhoices for your everyday and emergency cash That said, there isn't always a perfect correlation between return vs convenience and safety, so it pays to shop around and read the fine print. As financial institutions tag on more restrictions and provide less protection, the higher the return. In general, the safer and more liquid the account, the lower the rate of return. For example, you can decide to use a different account for your house savings as compared to your emergency savings or your everyday cash. The best choices for you will depend on your time frame, appetite for risk and your specific goals. ![]() This is definitely not one-size-fits-all. But now that interest rates have increased, and many accounts and cash investments are paying decent returns, it makes a lot of sense to pay close attention to our cash.Īs you review your various options, your goal is to find the best tradeoffs between liquidity (how quickly and conveniently you can access your money), safety (the return of your money), and yield (the return on your money). That's certainly understandable, especially during the previous years when cash investments were making next to nothing. In general, people tend to give a lot more attention to stocks and bonds than they do to cash. This is a really good question, and particularly relevant as we face a challenging inflationary environment. I'm unsure about where to keep these nonretirement savings. I'm setting aside money in my 401(k) every month, but also want to save up to buy a house in two years-plus build up my cash reserves in case I have an emergency-or even worse, lose my job.
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