Sarah Agostino at CNBC wrote about where to park cash after the May consumer price index came in at 4.2%, and asked me how to keep savings from losing ground. The national average savings account was paying 0.62% at the time. Some high-yield accounts paid around 4%.
That gap was my first point. The difference between what a major bank pays on a standard savings account and what you can earn at an online bank or credit union is real money, and most people are leaving it on the table. Emergency savings should stay liquid, in a high-yield savings or money market account, but liquid does not have to mean idle.
My second point was Treasuries. For cash you can hold for six to 12 months without touching, short-term Treasury bills are worth a serious look. A three-month bill was yielding about 3.7% annualized, a six-month about 3.8% and a one-year about 3.9%, and the interest is exempt from state and local income tax, which matters for anyone in Maryland or another high-tax state. Bills are also as safe as cash gets.
This is not about chasing yield. It is about matching each dollar to its timeline so that money you will not need for months is working while it waits. Cash that has a job in the next 30 days stays in the savings account. Cash with a longer runway earns its keep.
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