As you sift among the various options for your short-term investments, keep these key items on your dashboard: yield, guarantees, liquidity and your individual situation.
The short-term investments that promise the highest yields often come with at least some risk and/or constraints on your daily access to funds. It may be that you’re just looking for the highest safe yield and don’t care that much about liquidity. Or maybe having ready access to your funds is the name of the game.
Also think through whether you value an ironclad guarantee or are willing to go without in exchange for a potentially higher yield. Some cash instruments are fully FDIC-insured, while others are not. On the short list of FDIC-insured investments are checking and savings accounts, CDs, money market accounts (not to be confused with money market mutual funds), and online savings accounts.
CDs will typically offer the most compelling yields of all cash instruments, and they’re also FDIC-insured.
Yet there are a couple of caveats. One is that minimum deposits for the highest-yielding CDs might be $25,000 or even higher. There’s also a trade-off on the liquidity front: You’ll usually pay a penalty if you need to crack into your holdings before the maturity date. The longer the term of the CD, the bigger the penalty for cashing out early.
If you want daily liquidity, a decent yield, and FDIC protection, your best bet will tend to be a high-yield savings account through an online bank or a savings account through a credit union. The former offers FDIC protection, up to the limits, whereas credit union accounts are insured by another entity, the National Credit Union Administration.
Money market mutual funds also offer daily liquidity and the convenience of having those funds live side by side with your long-term investments. But money market fund yields are still generally below those of online savings accounts today. Additionally, money market mutual funds aren’t FDIC-insured, though in practice most funds have done an excellent job of maintaining stable net asset values.
Don’t confuse money market mutual funds with brokerage sweep accounts, though both are offered by investment providers. Interest rates on brokerage sweep accounts, which hold investors’ cash that hasn’t yet been invested, have ticked up a bit recently but are still well below other cash options.
Stable-value funds are another example of an investment that offers an often-decent yield in exchange for not checking the liquidity and guarantee boxes.
Stable-value funds are only accessible inside of company retirement plans. They invest in bonds, so they’re not FDIC-insured; to protect investors’ principal, they employ insurance wrappers to help maintain a stable net asset value. Just bear in mind that stable-value funds carry drawbacks. Because you can only own such a fund within a 401(k), you’ll pay taxes and penalties to withdraw your money before retirement unless you meet certain criteria. So don’t think of a stable-value fund as an emergency fund unless you’re already retired or close to it.
In contrast with the preceding investment types, I bonds are the only safe investment vehicles that will guarantee to make investors whole with respect to inflation. I bonds are Treasury bonds that pay a fixed rate of interest as well as another layer of interest that varies with the current inflation rate, as measured by the Consumer Price Index.
As attractive as that is, it comes with a few asterisks. If you redeem an I bond within five years of buying it, you’ll forfeit three months’ worth of interest. Purchase constraints are another drawback for large investors.
This article was provided to The Associated Press by Morningstar. For more personal finance content, go to https://www.morningstar.com/personal-finance
Christine Benz is the director of personal finance and retirement planning at Morningstar.
FILE - This Oct. 24, 2016 file photo shows dollar bills in New York. (AP Photo/Mark Lennihan, File)
WASHINGTON (AP) — The Justice Department does not believe there is currently any basis to open a criminal civil rights investigation into the killing of a woman by a U.S. Immigration and Customs Enforcement officer in Minneapolis, a top department official said Tuesday.
The decision to keep the Justice Department's Civil Rights Division out of the investigation into the fatal shooting of Renee Good marks a sharp departure from past administrations, which have moved quickly to probe shootings of civilians by law enforcement officials for potential civil rights offenses.
While an FBI probe is ongoing, lawyers in the Civil Rights Division were informed last week that they would not play a role in the investigation at this time, according to two people familiar with the matter who spoke on the condition of anonymity to discuss internal department deliberations.
And on Tuesday, Deputy Attorney General Todd Blanche said in a statement that “there is currently no basis for a criminal civil rights investigation.” The statement, first reported by CNN, did not elaborate on how the department had reached a conclusion that no investigation was warranted.
Federal officials have said that the officer acted in self-defense and that the driver of the Honda was engaging in “an act of domestic terrorism” when she pulled forward toward him.
The quick pronouncement by administration officials before any meaningful investigation could be completed has raised concerns about the federal government’s determination to conduct a thorough review of the chain of events precipitating the shooting. Minnesota officials have also raised alarm after federal officials blocked state investigators from accessing evidence and declared that Minnesota has no jurisdiction to investigate the killing.
Also this week, roughly half a dozen federal prosecutors in Minnesota resigned and several supervisors in the criminal section of the Civil Rights Division in Washington gave notice of their departures amid turmoil over the federal probe, according to people familiar with the matter.
Among the departures in Minnesota is First Assistant U.S. Attorney Joseph Thompson, who had been leading the sprawling investigation and prosecution of fraud schemes in the state, two other people said. At least four other prosecutors in the Minnesota U.S. attorney's office joined Thompson in resigning amid a period of tension in the office, the people said. The people spoke on the condition of anonymity to discuss personnel matters.
They are the latest in an exodus of career Justice Department attorneys who have resigned or been forced out over concerns over political pressure or shifting priorities under the Trump administration. Hundreds of Justice Department lawyers have been fired or have left voluntarily over the last year.
Minnesota Democratic lawmakers criticized the departures, with Sen. Amy Klobuchar, a member of the Senate Judiciary Committee, calling the resignations “a loss for our state and for public safety” and warning that prosecutions should not be driven by politics. Gov. Tim Walz said the departures raised concerns about political pressure on career Justice Department officials.
The resignations of the lawyers in the Civil Rights Division's criminal section, including its chief, were announced to staff on Monday, days after lawyers were told the section would not be involved in the probe. The Justice Department on Tuesday said those prosecutors had requested to participate in an early retirement program “well before the events in Minnesota,” and added that “any suggestion to the contrary is false.”
Founded nearly 70 years ago, the Civil Rights Division has a long history of investigating shootings by law enforcement even though prosecutors typically need to clear a high bar to mount a criminal prosecution.
In prior administrations, the division has moved quickly to open and publicly announce such investigations, not only to reflect federal jurisdiction over potential civil rights violations but also in hopes of soothing community angst that sometimes accompanies shootings involving law enforcement.
“The level of grief, tension and anxiety on the ground in Minnesota is not surprising,” said Kristen Clarke, who led the Civil Rights Division under the Biden administration. “And historically the federal government has played an important role by being a neutral and impartial agency committing its resources to conducting a full and fair investigation, and the public loses out when that doesn’t happen,” she said.
In Minneapolis, for instance, the Justice Department during the first Trump administration opened a civil rights investigation into the 2020 death of George Floyd at the hands of city police officers that resulted in criminal charges. The Minneapolis Police Department was separately scrutinized by the Biden administration for potential systemic civil rights violations through what’s known as a “pattern or practice” investigation, a type of police reform inquiry that is out of favor in the current Trump administration Justice Department.
Protesters demonstrate against Immigration and Customs Enforcement (ICE) after Renee Good, who was fatally shot by an ICE officer last week, Monday, Jan. 12, 2026, in Minneapolis. (AP Photo/Jen Golbeck)
