What To Do With Your Cash Now That Interest Rates Are Rising

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Cash is worth something again. With interest rates going up, here are some of the best things to do with your cash savings.

When you buy a government bond, assuming you hold it to maturity, you will get a guaranteed rate of return. Returns are expressed annually. So in this example, a 2-year Treasury would yield 4.22%for two years. So if you're wondering what to do with cash, Treasuries can be a great way to lock in yield with a Treasury ladder.

You can always sell the Treasury before it matures, but doing so could result in a loss. Interest rates and bond prices have an . So if interest rates go up, your bond is worth less . As an added bonus, Treasuries are exempt from state tax.Series I Bonds have been getting a lot of attention in the media because current rates are a stunning 9.62%. But investors can only buy $10,000 annually. Rates also change: it’s part fixed, part variable with inflation . The fixed rates have been very low for over 15 years, inflation generally also, so yields only became attractive more recently.

can be cashed in after one year, but if held less than five, you'll lose the last three months of interest.A certificate of deposit is similar to a Treasury, except it may be less liquid. When you buy a CD, you agree to keep your money invested in the CD for a certain period of time, in exchange for a stated interest rate. Banks issue CDs, not the U.S. government. Depending on your time horizon, CDs can sometimes offer competitive rates to Treasuries.

 

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What is this magical cash that you speak of? 🤔

Who tf is holding cash this late in a highly inflationary environment? If you had cash two years ago, you converted it to a stable store of value across time while the cash lost value.

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