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Analyzing the Pros and Cons of Where to Park Cash

The common options for cash can be complex and confusing.  These tend to be the three most common options:

Bank Deposits


Stable  and often insured

Easily accessible.

Flexible rates.  They can increase


Very low rates on deposits.  You’re lucky if you can find anything over 0.50% on bank deposits.

They will most likely stay below the long term inflation rate of 3%.


High Yield Savings Accounts


Typically has higher interest rates than bank deposits. Similar to Money Market funds.

Most likely insured.

Flexible rates that could exceed 3%.


Minimal customer service. Mostly done online.

Can be difficult to make deposits or withdrawals.


Certificates of Deposit


Better rates than Bank Deposits.


Subject to early withdrawal penalties.

Subject to interest rate risk.


Money Market funds


Returns may fall somewhere in between rates Bank Deposits and CDs.

No early withdrawal penalty.

Stable value of principal.


There can be declines in the portfolio.  It’s rare, but still possible.

Not insured.


Short Term Bond Strategy


Potential for better and higher REAL returns. (Real Return is the rate of return when you factor in inflation).

Diversification across multiple sectors and durations to minimize risk.


The value will fluctuate slightly.


Contact us today if you’re interested in making your cash work harder.