Making Your Money Work Harder
With the fed funds rate stubbornly high and inflation still running above 2%, savers have a rare opportunity to earn meaningful real returns. Yet most Americans still hold the bulk of their emergency fund in accounts paying under 1%. Here is how to do better.
1. High-Yield Savings Accounts (HYSAs)
The best online HYSAs are currently offering 4.8–5.1% APY. Unlike CDs, your money stays liquid. Top picks include Marcus by Goldman Sachs (5.05% APY), SoFi (4.90% APY), and Ally Bank (4.85% APY).
2. Treasury Bills via TreasuryDirect
4-week and 13-week T-bills are yielding around 5.2% annualised. They're backed by the US government, making them essentially risk-free. Buy directly at TreasuryDirect.gov to avoid brokerage fees.
3. Money Market Funds
Institutional-class money market funds like Vanguard Federal Money Market (VMFXX) yield 5.15% with same-day liquidity. They hold short-term government securities and are far safer than bond funds.
4. I-Bonds
Series I savings bonds are currently paying a composite rate of 4.28%. While you are limited to $10,000/year and must hold for 12 months, they offer inflation protection unavailable elsewhere.
5. Short-Duration CD Ladders
Lock in today's rates before the next cut. A 6-month/12-month/18-month ladder across three CDs provides both yield and flexibility. Current best rates: 5.35% for 6-month, 5.10% for 12-month.
Bottom Line
Do not let your cash sit idle. Even moving $20,000 from a 0.5% account to a 5% HYSA earns an extra $900/year in interest—essentially free money.