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  • Newmyer Wealth Management

Maximizing Returns: A Professional Guide to Earning Interest on Short-Term Cash

In 2019, we discussed the importance of earning interest on your cash when interest rates were lower than they are today. Here is an update. Enjoy!

In the realm of personal finance, optimizing returns on short-term cash is a crucial aspect of wealth management. Whether you're stowing away an emergency fund, planning for a near-future expense, or simply aiming to make your money work harder for you, strategic deployment of short-term cash is essential. In this blog post, we'll delve into professional strategies to maximize interest on your short-term funds.

  1. High-Yield Savings Accounts: One of the most straightforward and secure methods to earn interest on short-term cash is through high-yield savings accounts. These accounts, offered by various financial institutions, provide a higher interest rate than traditional savings accounts. While the rates may not match those of riskier investments, the principal is protected, making them an ideal choice for preserving capital while earning a respectable return.

  2. Certificate of Deposit (CD): Certificates of Deposit offer another avenue for securing higher interest on short-term cash. By locking in your funds for a fixed period, typically ranging from a few months to several years, you can enjoy higher interest rates than standard savings accounts. However, it's crucial to carefully assess your liquidity needs before committing to a CD, as early withdrawals may incur penalties.

  3. Money Market Accounts: Money market accounts are a hybrid option, blending features of both savings and checking accounts. These accounts often provide higher interest rates compared to regular savings accounts, along with the added benefit of check-writing capabilities. Money market accounts are particularly suitable for those seeking a balance between liquidity and competitive interest rates.

  4. Short-Term Bond Funds: For investors with a slightly higher risk tolerance, short-term bond funds offer a more dynamic approach to earning interest. These funds invest in a diversified portfolio of short-term bonds, providing potential for higher returns than traditional savings accounts or CDs. However, it's crucial to note that bond funds carry market risk, and returns are not guaranteed.

  5. Treasury Bills (T-Bills): Considered one of the safest short-term investments, Treasury Bills are issued by the U.S. government and serve as a low-risk, low-return option. T-Bills come with various maturity periods, ranging from a few days to a year. While the yields may be modest, the security and liquidity make them an attractive choice for risk-averse investors.


Effectively earning interest on short-term cash requires a nuanced understanding of your financial goals, risk tolerance, and liquidity needs. By strategically leveraging options such as high-yield savings accounts, CDs, money market accounts, short-term bond funds, and Treasury Bills, you can strike a balance between preserving capital and maximizing returns. These are great topics of conversation at Newmyer Wealth Management. Give us a call to tailor these strategies to your unique financial situation and objectives. Remember, a well-informed approach to short-term cash management lays the foundation for long-term financial success.

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