As you consider your options for short-term investments, keep three key items in mind.
CDs will typically offer the most compelling yields of all cash instruments, and they’re also FDIC-insured.
There are caveats: Minimum deposits for the highest-yielding CDs might be $25,000 or higher. 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. Banks offer “no-penalty CDs,” but yields are substantially lower.
Retirees or others with ongoing cash flow needs can employ a laddered CD strategy, purchasing CDs of varying maturities. For emergency reserves, however, CDs will be less appropriate because withdrawals are apt to be unplanned and could trigger penalties.
If you want daily liquidity, a decent yield, and 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 the National Credit Union Administration. Minimum investment amounts tend to be lower than those for CDs, but there may be requirements to maintain a minimum balance.
Money market mutual funds, from providers like Fidelity, Schwab, and Vanguard, offer daily liquidity and the convenience of being side by side with your long-term investments. But money market fund yields are generally below those of online savings accounts today. Additionally, they 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. Interest rates on sweep accounts, which hold investors’ cash that hasn’t yet been invested, have ticked up recently but are still well below other cash options.
Stable-value funds, only accessible inside company retirement plans, offer an often-decent yield in exchange for not checking the liquidity and guarantee boxes. 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.
There are drawbacks: First, 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. Second, the assets aren’t guaranteed or eligible for FDIC protection.
In contrast with the preceding investment types, the income from which will be gobbled up by inflation, 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. The inflation adjustment is made twice a year.
The downsides: First, I bonds fail the liquidity test. If you redeem an I bond within five years of buying it, you’ll forfeit three months of interest. Second, new I-bond purchases are restricted to $10,000 per year per Social Security number.
This article was provided to The Associated Press by Morningstar. For more personal finance content, go to https://www.morningstar.com/personal-finance.
ChristineBenz is director of personal finance and retirement planning for Morningstar and co-host of The Long View podcast.
Related Links:
The Biggest Threat to Your Retirement Isn’t a Bear Market
https://www.morningstar.com/retirement/biggest-threat-your-retirement-isnt-bear-market
Adam Grossman: Asset Allocation Is an Investor’s Best Defense
https://www.morningstar.com/personal-finance/adam-grossman-asset-allocation-is-an-investors-best-defense
How to Protect Your Portfolio in a Changing Market
https://www.morningstar.com/portfolios/how-protect-your-portfolio-changing-market
FILE - Cash is fanned out from a wallet in North Andover, Mass, June 15, 2018. (AP Photo/Elise Amendola, File)
MINNEAPOLIS (AP) — Rookie sensation Olivia Miles spearheaded an efficient offense with 28 points, Courtney Williams added 27 points, and the Minnesota Lynx won their 10th straight game with a 108-100 victory over the Indiana Fever on Sunday.
There was a rally outside the Target Center that pitted those supporting Fever reserve Sophie Cunningham, who told ESPN last week she believed trans athletes should not play against girls, against those with the opposite feeling. Minnesota coach Cheryl Reeve wore a shirt that read, “Trans kids belong,” and had a pregame conversation with Cunningham, who was booed throughout the game.
"Both of us understand that we have platforms and we both talked about wanting to, more than anything, educate,” Reeve said after the contest.
Minnesota had a 96-82 lead with 6:41 to play before the Fever, who had scored 100 in a record six-straight games, pulled within 100-98 with more than 2 1/2 minutes to go. Miles and Williams both came up with big baskets as the Lynx won their 10th straight for the first time since 2016.
“First time playing each other, so there’s a bit of a feeling out sort of thing," Reeve said. "And offense definitely had their way with each of the teams’ defense. Certainly knew it probably wasn’t going to be sustained, and it wasn’t. We were hoping at some point our defense could be a separator.
“We felt like we had to really fight to win, and glad we glad we did that. The next time we play them, each team is going to have a lot more information.”
The league’s No. 1 offense definitely made life difficult for the league’s No. 2 defense, but the Fever, who played in Portland on Friday night, struggled to stop the Lynx on the offensive end. Both teams shot 57% and both had 11 3-pointers and went 11 of 15 from the foul line. They also combined for 55 assists. The big difference was Indiana had 12 turnovers to six for Minnesota, which had an 11-5 edge in offensive rebounds and 9-0 advantage in fast-break points.
Napheesa Collier had 18 points, eight rebounds and seven assists for the Lynx (25-6). Natasha Howard scored 13 points and Kayla McBride 10.
The Fever (19-11), who had their five-game winning streak halted, were led by Kelsey Mitchell with 37 points, her fifth 30-point game of the season and 14th straight 20-point game, second in league history behind A'ja Wilson's 15-straight in a single season. Caitlin Clark added 19 points and 10 assists and Aliyah Boston had 15 points, eight rebounds and seven assists.
“We were just a little bit of a step slow," Clark said of the defense. “ Proud of our group for finding ways to adjust, and that’s what you have to do versus a really good team.”
Both teams got off to a blistering start with Minnesota leading 36-32 after one quarter, tying the league record for most points in an opening period. Mitchell had 16 points in the first period, but Miles had 14 in the second and the Lynx led 64-53 at the break.
The crowd, listed as 16,505, certainly had plenty of Fever fans. That's not a surprise given that Clark grew up in West Des Moines, Iowa, which is about 3 1/2 hours away.
“It was weird hearing fans cheer when the other team scored,” Miles said. “Both ways, there was cheering for baskets and it was just loud in there. The energy, it's what you want as a basketball player.”
Fever: Home against Las Vegas on Thursday.
Lynx: Home against Los Angeles on Thursday.
AP WNBA: https://apnews.com/hub/wnba-basketball
Minnesota Lynx guard Courtney Williams (10) celebrates with teammates after making a basket during the second half of a WNBA basketball game against the Indiana Fever, Sunday, Aug. 2, 2026, in Minneapolis. (AP Photo/Abbie Parr)
Indiana Fever guard Caitlin Clark, left, dribbles downcourt as Minnesota Lynx guard Kayla McBride (21) defends during the first half of a WNBA basketball game Sunday, Aug. 2, 2026, in Minneapolis. (AP Photo/Abbie Parr)
Minnesota Lynx head coach Cheryl Reeve, left, and guard Olivia Miles (5) stand on the court during the first half of a WNBA basketball game against the Indiana Fever, Sunday, Aug. 2, 2026, in Minneapolis. (AP Photo/Abbie Parr)
Fans wear shirts saying "Trans Kids Belong In Sports" during a WNBA basketball game between the Minnesota Lynx and the Indiana Fever Sunday, Aug. 2, 2026, in Minneapolis. (AP Photo/Abbie Parr)
Indiana Fever guard Sophie Cunningham (8) and Minnesota Lynx head coach Cheryl Reeve, right, stand on the court during the first half of a WNBA basketball game Sunday, Aug. 2, 2026, in Minneapolis. (AP Photo/Abbie Parr)
