Kate Ashford, Nerdwarette
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In recent weeks, 44% of Americans in households have made more than $125,000, and say they have put more cash aside to cover future expenses. This is according to the Conference Committee’s May Consumer Trust Report.
But are they investing it?
“Leaving money in cash forever is not a plan,” says Rebecca Palmer, certified financial planner in Washington, DC and head of guidance for the Financial Planning Platform.
“We’re actually postponing plans,” she says.
According to the report, a third (37.7%) of consumers expect their stock prices to fall in the next 12 months. This is more optimistic than the 47.2% in April, but higher than the 23.7%, which was expected to fall in January.
“There’s definitely a sense of fear right now in the market,” Palmer says. “A lot of people feel this (and) it’s fine.”
But she emphasizes that fear is not a strategy, but a starting point.
Why are people nervous about the market?
Turbulence is contributing to people’s investment concerns. According to some measures, the level of stock market volatility in April was the highest since 2020.
Investors today are kneeling for the incredible headlines and social media fate, Palmer says.
“They have far more overwhelming than previous generations, even if it’s the same kind of market turbulence that happens,” she says.
But you can keep your money in your checking account, not earn interest (or pillowcases, you know who you are), and put you at a disadvantage.
“You’re losing money to inflation,” says Palmer.
Where can I put my money?
If you’re worried about the stock market or have access to money for a close target, here are some places you can consider investing in cash to earn interest and staying at a rise in consumer prices.
High-yield savings account
Potential interest rate: 4%+
High-yield savings accounts offer higher profits than traditional bank savings accounts. Many banks that offer these fees are online and offer the same protection as brick and mortar banks if you have FDIC insurance.
“If you can save 4% and even 3.8% against the pointlessness that one of the large brick-and-mortar banks has, you can get a better rate,” says Cindy Sforza, CFP, who has Lucidity Wealth Advisors in Blair, California.
Bank Deposit Certificate (CDS)
Potential interest rate: 4%+
A certificate of deposit (CD) is a short-term savings account that can lock interest rates for a specific period, i.e. 6-12 months, with some conditions for a period of five years.
The trade-off is that your money is also locked up. If you withdraw early, you can pay a penalty.
If your CD’s interest rate is higher than other savings accounts, this can be an easy way to earn some interest. But if the interest rates on a CD match what you find in other short-term locations, it may not be worth committing, Sforza says.
“Frankly, today’s CD rates are pretty close to what you get from a high-yield savings account anyway, and CDs are time commitments,” Sforza says. “Make sure it makes sense to shop for rates and tie them up on CDs.”
Your goals will determine your choice – if you need to keep your money accessible, the CD may not be your top pick.
Money Market Account
Potential interest rate: 3.5% – 4.4%
Money Market Accounts are savings accounts that offer higher interest rates than traditional savings accounts, with limited check writing and debit card access to funds. Money market rates may not match the highest earning savings accounts, but HYSA typically does not offer checks or debit cards.
“(Money Market Accounts) may give you a slightly lower fee for money because they have a little more access to your savings account,” Sforza says.
Ministry of Finance’s Invoice
Potential interest rate: 4%+
The Treasury bill, or T-Bill, is a government-supported investment with conditions ranging from four weeks to one year. You can buy T-Build from a bank or brokerage or invest directly from TreasuryDirect.gov.
“This is not the largest website in the world,” says John Bell, CFP with free state financial planning in Columbia, Maryland.
However, when you link your bank account to the site, you have the option to invest in the T-build of your choice, and if necessary, you can automatically reinvest when that T-build matures.
Another relatively new option available is financial accounts offered by some brokerage companies. This is the work of buying T-Bill, keeping it mature and reinvesting profits.
The advantage of Treasury billing is that, aside from their low risk and the fact that government is imposed, the interest you gain is state and local tax-free.
“So, we’re getting a little more yield, especially if we’re in high tax conditions,” Bell says.
Many brokers also offer Treasury Exchange Funds (ETFs) or index funds that allow you to invest in a basket of various financial products.
What is the bottom line?
The above methods will attract interest, but are not the best solution for long-term savings and investments, says Sforza. If it’s money you won’t touch for at least five years, she says, it’s probably better to invest it.
“Yes, the market goes up and down, but that’s your long-term money,” she says. “That’s not the money you’re dependent on tomorrow to pay your bill.”
If stock market ideas are stressing you, consider letting your portfolio do the work for you. Index funds, index ETFs, and target date retirement funds are easy ways to soak your toes in investment water, says Sforza.
Kate Ashford, CSA® writes about Nerdwallet. Email: kashford@nerdwallet.com. Twitter: @kateashford.
Where to park your cash if you’re worried about the stock market originally appearing on Nerdwallet.
Original issue: June 13th, 2025 EDT
