The Best Places to Park Your Cash Right Now

Where to find the best yield, from savings accounts to CDs.

It’s a great time to be a saver. Even as mortgage rates have hit 8%, rates on savings products have also risen. You can now easily get north of 4% or even 5% on your money if you know where to look.

There are lots of great high-yield products available — from savings accounts to CDs. But to find the best rates, you’re going to have to look mostly to online banks and fintechs. Brick-and-mortar banks like Chase and Bank of America continue paying almost nothing on deposits. While they may come in handy if you need a physical branch location, if you want a place where you can park your cash and earn as much as you can in interest, they’re of no use to you.

Here are some places you could think about putting away cash right now and maximize your return.

Savings Accounts

Savings accounts are going to offer the most flexibility out of all the options here. They offer a place to put your money while earning a variable interest rate. When rates rise across the board, many savings accounts increase their rates. And when rates fall, savings accounts typically fall as well (although you’ll find that most banks are quicker to drop their rates than raise them). While federal banking regulations no longer mandate a maximum of six withdrawals per month, many banks maintain those caps. Most importantly, your money is FDIC-insured for up to $250,000 per account owner.

1. Ally - 4.25%

Account Fees: No

Account Minimums: No

Unique Features: Up to 10 buckets to split your savings goals

The Catch: None

2. Discover - 4.35%

Account Fees: No

Account Minimums: No

Unique Features: None

The Catch: None

3. Marcus - 4.40%

Account Fees: No

Account Minimums: No

Unique Features: None

The Catch: None

4. LendingClub - 4.50%

Account Fees: No

Account Minimums: $100 to open

Unique Features: None

The Catch: None

5. SOFI - 4.60%

Account Fees: No

Account Minimums: No

Unique Features: Up to 20 vaults to split your savings goals, roundups on debit card purchases and up to $2 million of optional FDIC coverage

The Catch: Must set up direct deposit into a SOFI checking or savings account to receive the highest rate

6. CIT - 5.05%/4.65%

CIT has two savings accounts with high rates:

Platinum Savings - 5.05%

Account Fees: No

Account Minimums: $100 to open

Unique Features: None

The Catch: Must maintain a balance of at least $5,000 to earn 5.05%, otherwise rate is 0.25%

Savings Connect - 4.65%

Account Fees: No

Account Minimums: $100 to open

Unique Features: None

The Catch: None

7. Upgrade - 5.07%

Account Fees: No

Account Minimums: $1,000 minimum balance requirement

Unique Features: None

The Catch: None

8. BMO Alto - 5.10%

Account Fees: No

Account Minimums: No

Unique Features: None

The Catch: None

9. Bask Bank - 5.10%

Account Fees: No

Account Minimums: No

Unique Features: None

The Catch: None

10. EverBank - 5.15%

Account Fees: No

Account Minimums: No

Unique Features: None

The Catch: Rate is a one-year intro offer (otherwise 4.75%)

11. UFB Direct - 5.25%

Account Fees: No

Account Minimums: No

Unique Features: None

The Catch: They frequently release new savings products and don’t automatically upgrade you to the new account at the higher rate

Money Market Accounts

Money market accounts are very similar to savings accounts but with some of the features of checking accounts, like the ability to write checks and debit cards. Sometimes money market accounts offer higher rates than savings accounts, but it varies.

1. Discover - 4.20%/4.25%

Account Fees: No

Account Minimums: $2,500 to open

Unique Features: None

The Catch: Account pays 4.20% for balances under $100,000 and 4.25% for balances $100,000 and over

2. Ally - 4.40%

Account Fees: No

Account Minimums: No

Unique Features: None

The Catch: None

3. Sallie Mae - 4.75%

Account Fees: No

Account Minimums: No

Unique Features: None

The Catch: No debit card

4. EverBank - 4.75%

Account Fees: No

Account Minimums: No

Unique Features: None

The Catch: Rate is a one-year intro offer, otherwise a complicated balance tier: 3.75% on $0 to $49,999.99, 4.05% on $50,000 to $99,999.99 and 4.30% on $100,000 and up

5. Zynlo - 5.00%

Account Fees: No

Account Minimums: No

Unique Features: None

The Catch: Balances above $250,000 earn 0.10%

6. Vio Bank - 5.25%

Account Fees: No

Account Minimums: $100 to open

Unique Features: None

The Catch: None

Money Market Funds

Money market funds present another great savings option with some of the most attractive rates right now. Not to be confused with money market accounts, these are a type of mutual fund that invest in cash and low-risk short-term treasuries and corporate bonds with a maturity date of 1 year or less.

Unlike savings accounts, money market funds have fees in the form of expense ratios, so you need to take that into account when looking at the latest rate. They also don’t have the same FDIC protections as savings accounts, money market accounts and CDs. Money market funds work to maintain the value of their shares at $1. But there is always the risk that a fund loses value during a crisis, as happened in 2008. Federal regulations since then have made that unlikely to reoccur, but you should still understand the very low risk money market funds carry compared to FDIC-insured bank accounts.

1. Vanguard Federal Money Market Fund (VMFXX) - 5.30%

Expense Ratio: 0.11%

Minimum Investment: $3,000

2. Schwab Value Advantage Money Fund (SWVXX) - 5.24%

Expense Ratio: 0.34%

Minimum Investment: $0

3. Invesco Government Money Market Fund (INAXX) - 5.09%

Expense Ratio: 0.32%

Minimum Investment: $1,000

4. Fidelity Money Market Fund (SPRXX) - 5.08%

Expense Ratio: 0.42%

Minimum Investment: $0

5. JPMorgan Prime Money Market Fund (VMVXX) - 5.13%

Expense Ratio: 0.50%

Minimum Investment: $1,000

CDs

A certificate of deposit (CD) is a great alternative to a savings account if you want to lock in a rate. That way, if interest rates start falling next year, you’re still earning a great rate on your savings. On the other hand, CDs come with the risk that if rates continue rising dramatically, a variable rate savings account starts exceeding the rate on the money you’ve just locked up. It’s a delicate balancing act that requires you to consider where rates may be headed as well as your goals and time horizon. Here are some selected rates that look attractive now.

1. CIT - Up to 5.00%

6-Month: 5.00%

Account Fees: No

Account Minimums: No

2. Ally - Up to 5.15%

9-Month: 5.00%

1-Year: 5.00%

18-Month: 5.15%

Account Fees: No

Account Minimums: No

3. Discover - Up to 5.20%

1-Year: 5.20%

18-Month: 5.00%

Account Fees: No

Account Minimums: $2,500 to open

4. Marcus - Up to 5.20%

9-Month: 5.00%

1-Year: 5.20%

18-Month: 5.15%

Account Fees: No

Account Minimums: $500 to open

5. EverBank - Up to 5.50%

9-Month: 5.50%

1-Year: 5.00%

Account Fees: No

Account Minimums: $1,000 to open

6. BMO Alto - Up to 5.50%

6-Month: 5.20%

12-Month: 5.50%

2-Year: 4.75%

Account Fees: No

Account Minimums: No

7. LendingClub - Up to 5.65%

6-Month: 5.30%

1-Year: 5.65%

18-Month: 5.00%

Account Fees: No

Account Minimums: $2,500 to open

8. Forbright - Up to 5.75%

9-Month: 5.75%

1-Year: 5.65%

Account Fees: No

Account Minimums: $1,000 to open

Don’t Just Chase Yield

It’s not always worth it to go for the highest-paying savings product. Many banks offer unusually high rates as a short-term promotional offer but don’t tend to keep up with the average over the long term. Some banks may offer higher rates only for new customers while existing customers are stuck with lower rates.

The UFB Direct savings account offers one of the highest rates out there right now. The problem is that they’ve released multiple savings products over the last year. While new customers get the latest account and rate, existing customers must ask to upgrade their account or get stuck with the previous lower rate. This is the sort of bait-and-switch tactic you get when chasing after savings accounts with the highest rates. On the other hand, well-known banks like Discover and Ally pay relatively modest rates but consistently increase their rates as interest rates overall rise.

It’s also not always worth it to move your money for a fraction of a percentage point. Opening a new account and moving money can be a hassle, and at the end of the day, we’re talking about a few dollars more in interest.

Using Cash Wisely

No matter how good 5% on your money sounds right now, it’s still not a good long-term investment. Inflation remains at nearly 4%, so your money is only barely beating it with these rates.

You should carefully consider your goals before putting a large sum of money in a cash savings account, CD or money market fund. You should use one of these accounts if you’re keeping money for an emergency or have some sort of goal within the next 5 to 7 years. Long-term money should still go into long-term assets, like stocks.

If you still have savings in a brick-and-mortar bank, there’s no reason to keep it there any longer. If your cash is going to sit in a bank account, you might as well earn some money on it.