Best Places To Park Your Cash
T-Bill & Chill – 3mo U.S. Treasury Bills are available for 5.39% yield. They mature March 2024, at which time you would need to reinvest that money. The interest is also exempt from state tax.
High Yield Savings Account – CIT Bank offers a 5% savings account with no monthly fees and only $100 initial deposit. The website is easy to navigate and the mobile app is functional.
CDs – There are many CDs offering rates between 5.50-5.75% for 1yr lockup. Check out a site like Bank Rate to find one that is a good fit for you.
Floating Rate Treasury ETF – If you believe that rates could go higher, a fund like USFR could make sense. Current yield is 5.38%, expense ratio is only 0.15%, and duration is <1yr since it holds floating rate U.S. treasury bonds.
California Muni ETF – If you have a high tax rate in a state like CA, you may want to look at a muni ETF like DFCA. This one is currently paying 3.58%, but that is the equivalent of 5.51% for someone with a tax rate of 35%. This fund does have more risk than the options above since it invests in bonds with ~3.85yrs duration.
Keep in mind that you should not be trying to time the stock market and move money in-and-out of your long term investments. These options are for emergency funds, liquid cash needs, or short term investment needs only. The bulk of your money should be invested with your long term strategy in mind.
