If your good money habits have saved you some extra cash — or you’ve been setting money aside for a goal — you might be wondering:
“Okay… where should I put this?”
I’ve had three people ask me this question in the past few weeks.
When it comes to low-risk options for your savings, here are three options you can consider:
1. CDs
2. High-yield savings
3. Short-term Treasury investments
I’ve personally have used all three of these options, and I've also used higher-risk investments (stocks) for long-term growth. But this article focuses on low-risk options that preserve your money while offering modest growth.
Before we get into the details, we need to talk about something more important.
Start with a Dedicated Emergency Fund
An emergency fund is dedicated savings for unexpected life events (injury, income loss, emergency home repair).
This is stability money that can help protect you from whatever happens in the future. You can start with $500 or $1000, then consider growing it to 3-6 months of expenses. This might sound impossible, but it's something you can work towards over time.
Now let’s walk through the three main options for your low-risk savings — including where your emergency fund should live.
1. CDs (Certificate of Deposit)
A CD gives you a guaranteed return for a set period of time. In exchange, your money is essentially “locked” for that term — you can access it early, but you’ll usually pay a penalty to do it. This is often the easiest move because your bank will help you. You walk into your existing bank (or log in), they offer a rate, you click a few buttons, and you’re done.
Pros:
- Simple to set up
- Guaranteed return
- No new accounts logins to manage (if using your current bank)
- “Locked up” money can prevent impulse spending
Cons:
- Not flexible
- Penalties for early withdrawal
- Can’t easily add more money
- Forces a new decision when the CD matures / renews
For many people, any financial move feels intimidating or overwhelming. A CD at your current bank is probably the easiest short-term action you can take.
But it’s not the most flexible long term solution.
CDs should not be used for an emergency fund because you don't want penalties when an emergency happens. Use caution for any CD longer than 12 months — your financial position can change a lot in 12+ months, so consider 3-, 6-, or 12-month CDs depending on the rates offered by your bank.
2. High-Yield Savings (Great for most people)
A savings account is similar to a checking account, but it's designed for money to "sit and grow". After some setup or account linking, you can transfer money between your existing accounts and your savings account as needed. Online banks (like Capital One 360 Performance Savings) offer savings accounts with:
- No minimum balance
- No monthly fees
- Competitive interest rates
- Easy-to-use app & website
Pros:
- Most flexible — add or remove funds as needed
- Often easy to use (transfer money) if you are comfortable with phones or computers
- Can get competitive return as compared to a CD
- Great option for your emergency fund
Cons:
- Account setup and transfers may feel intimidating
- Some "savings" accounts do not actually offer a good rate of return. As of early 2026, around 3% is generally considered competitive.
- Over time, the account's rate can drop (bad) or rise (good) based on broader economic conditions
- Some banks have fees or minimum balance requirements (avoid these)
- Transfers can take a few days between accounts (this can be scary when money is in-transit)
A more advanced option is a brokerage account at Fidelity (advertised as "The Fidelity Account"). Cash sitting in the account is automatically invested in a money market fund earning a competitive rate. Plus, as you grow more confident, you'll have the account as an option to invest in stocks, mutual funds, or ETFs.
3. Short-Term Treasury & Bond Funds (Like SGOV or SCUS)
This is slightly more advanced, but still considered very low risk. These are investment funds you buy in a brokerage account that invest in very short-term bonds and U.S. Treasury bills. If you didn't understand what you just read, that's okay, here's the summary:
Pros:
- Considered very low risk
- Rate of return is typically equal to or greater than a savings account
- Flexible - you can add or remove funds as needed
- Interest may be exempt from state taxes!
Cons:
- Requires a brokerage account
- Slightly more complex (you have to "buy" to invest and "sell" to cash out)
- There isn't a guaranteed advertised rate like a CD or Savings account
- Could make your taxes slightly more complex
The Marco Money Take
There is no “correct” option. You just need the option that appeals to your financial needs.
- If you want guaranteed rate and possible assistance from your bank ➡️ CD
- If you want flexibility and a long-term solution ➡️ High-yield savings account
- If you’re comfortable investing and want possible tax efficiency ➡️ Short-term bond / treasury funds
It's okay to start small. Try something new and see how it goes!
If your money habits have gotten you to the point where you’re considering these options — that’s a huge win .