Certificates of deposits and Treasury bills. CDs and Treasury bills can earn more income than online savings accounts, but your access to the funds will be limited because they must be held for a minimum amount of time, Sullivan says. You’ll need to identify the specific CDs or Treasurys you want to buy and then restart this process each time the holdings mature, which could be anywhere from a few days for Treasury bills to many years with CDs. Treasury bills are often sold at a discount from the face value, which is the value once the bill matures.
If you shop around for CDs, you can probably find a suitable combination of term and rate. You can even ladder CDs so that they mature at different times, says Alexander S. Lowry, a finance professor at Gordon College in Wenham, Massachusetts. This allows you to exit one or more of the CDs if interest rates rise. “A CD ladder will get you higher interest rates without sacrificing accessibility,” he says.
The five-year Marcus by Goldman Sachs CD is currently at about 2.8 percent, says Kellerman. A one-year CD earns about 2.2 percent at Goldman Sachs, Barclay and Capital One, while a six-month CD at Ally Bank is about 1.5 percent. Many CDs don’t have minimum deposits.
You’ll want to check that the Federal Deposit Insurance Corp. insures the bank providing a CD. Doing so is “as simple as examining the website of the issuing bank for member FDIC postings or inquiring with a representative by phone or in person,” says Jim Brown, a certified public accountant and author of YourBestMindset.com, an online guide for choosing a financial advisor. FDIC signs are often posted on bank windows or on plaques inside bank branches.