I'm selling my house next month and will rent for a while. I'm looking to find a place to stash the cash that is 100% safe and will make me a little interest each month. What is the best option? CD? HYS? Is there something else I don't know about? Thank you!
What to do with money from house sale that will be 100% safe?
byu/Far_Pollution_5120 inpersonalfinance
Posted by Far_Pollution_5120
4 Comments
It depends on what you’re keeping the money safe from.
Nominal loss of principal: HYSA, Treasury bills held to maturity, federal money market fund, etc.
Inflation: HYSA, T-bills held to maturity, federal money market fund (partial mitigations), I bonds (locked for 1 year)
Changes in interest rate: CD, longer-term Treasury
How long are you keeping it liquid? How much are we talking, 50k or 750k? What’s your current tax bracket for Fed and state? Lots of potential places to safely invest
High yield Savings is pretty much the only 100% safe option. Unless the entire banking system and government explodes tomorrow, which I’d say you’ll have bigger problems to worry about.
Are you planning to use that money again within a year or is the timeline still open, and is it a single lump sum or spread out? For something that needs to be safe, people usually stick with high yield savings or short term CDs since they’re straightforward and insured, the tradeoff is you’re not getting big returns but you’re not risking the principal either.
If you want a bit more structure, laddering a few CDs can give you regular access while still earning slightly better rates than a basic account. The main caveat is to double check insurance limits and avoid anything that promises higher returns with “no risk,” because that’s usually where things stop being truly safe.