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10 Best Places To Put Your Cash Besides the Bank

Learn where to park your money for the best combination of safety and growth.

By Adam Palasciano

Edited by Eric McWhinnie

Updated Dec. 17, 2024

When it comes to managing your cash, traditional bank savings and checking accounts aren’t the only options.

While banks offer security, there are numerous other places to park your money that can provide better returns and flexibility.

Here are 10 alternatives to consider, each with its own features and benefits.

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If you have at least $10k to invest and are ready to explore diversifying beyond stocks and bonds,see what Masterworks has on offer. (Hurry, they often sell out!)

Money market mutual funds (MMMF)

Money market mutual funds (MMMFs) are a popular choice for those seeking higher returns than traditional savings accounts.

These funds invest in U.S. Treasuries and other high-quality fixed-income securities, aiming to offer better yields while maintaining liquidity.

Share prices are typically fixed at $1 and generate interest income. Interest earned from MMMFs that invest in municipal securities can be exempt from federal, state, and local taxes.

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Money market accounts

Money market accounts combine the benefits of savings accounts and checking accounts, offering higher interest rates with the convenience of check-writing and debit card access.

These accounts are FDIC-insured up to $250,000 per depositor, providing a secure place for your cash while earning higher interest than a regular savings account.

Treasury notes

Treasury notes, known as T-notes, are issued by the U.S. government and are a safe and reliable investment. They come with maturities ranging from 2 to 10 years and are backed by the full faith and credit of the U.S. government.

Treasury notes pay interest every six months and can be purchased in increments of $100, making them a stable choice for those seeking to preserve capital and earn steady income over time.

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Secret: You don't need thousands of dollars to buy thousand-dollar stocks or create a diverse portfolio.

Robinhood offers a method of investing called “fractional shares.” On its own, one share of a single stock could cost a lot of money, making it difficult to diversify. Robinhood allows you to buy pieces of stock instead, so you have the option to build a diverse portfolio quickly.

Let’s say you want to invest $250, as an example.

With that amount, you could build a relatively diverse portfolio with an investment of $50 in a big tech stock, $50 in a retail stock, $50 in an energy stock, $50 in a manufacturing stock, and $50 in a bank.¹ This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice. To get stock reward, new customers need to sign up, get approved, and link their bank account. Stock rewards shares cannot be sold until 3 trading days after the reward is granted and the cash value of the stock rewards may not be withdrawn for 30 days after the reward is claimed. Stock rewards not claimed within 60 days may expire. See full terms and conditions at <a href="https://robinhood.com/us/en/support/articles/open-account-pick-your-stock/">rbnhd.co/freestock</a>. Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement. Robinhood Gold is offered through Robinhood Financial LLC and is a membership offering premium services available for a fee.

Even better news? Add a Robinhood Gold membership, and you’ll get access to 4.25% (as of 11/15/24) APY² Annual Percentage Yield. Rate valid as of April 12, 2024. To earn interest, a cash balance is needed. If you have a margin balance, there is no cash balance to earn interest. Interest rates for cash sweep and margin investing can change at any time. Fees may reduce interest earnings. on your uninvested cash³ Interest is earned on uninvested cash swept from your brokerage account to partner banks. Partner banks pay interest on your swept cash, minus any fees paid to Robinhood. As of Nov 15, 2023, the Annual Percentage Yield (APY) that you will receive is 1.5%, or 5% for Gold customers. The APY might change at any time at the partner banks' or Robinhood's discretion. Additionally, any fees Robinhood receives may vary and are subject to change. Neither Robinhood Financial LLC nor any of its affiliates are banks. All investments involve risk and loss of principal is possible. Robinhood Financial LLC (member SIPC), is a registered broker dealer. and the ability to buy and sell stocks 24 hours a day, 5 days a week.

Open and fund a Robinhood account and earn up to $200 in stock

Treasury bonds

Similar to Treasury notes, Treasury bonds (or T-bonds) are also backed by the U.S. government. The difference is that they have longer maturities, typically 20 to 30 years, and typically provide the highest interest rates of any government-issued security.

They provide a fixed interest payment every six months until maturity and can be purchased in increments of $100.

Treasury bills

Treasury bills, known as T-bills, are short-term government securities with maturities of one year or less. They are sold at a discount and mature at face value, providing a guaranteed return.

Treasury bills are highly liquid and virtually risk-free, making them an excellent cash option. They can be purchased in increments of $100 through an investment bank, a broker, or at auction on the TreasuryDirect.gov website.

FDIC-insured sweep accounts

FDIC-insured sweep accounts allow you to transfer funds that exceed or fall short of a certain threshold into a higher-interest-earning account or investment.

These accounts are often used by businesses to optimize cash flow management, but they can also be beneficial for individuals looking to maximize the interest earned on their idle cash.

With sweep accounts, you might also be able to protect amounts beyond the $250,000 FDIC limit.

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Corporate bonds

Highly rated corporate bonds can offer a relatively safe and higher-yield alternative to government securities. These bonds are issued by companies with strong credit ratings, providing a steady income stream through fixed-interest payments.

While corporate bonds carry more risk than Treasury securities, they typically yield higher interest.

Short-term bond funds

Short-term bond funds invest in bonds that mature relatively soon. These funds aim to provide higher returns than money market funds while maintaining a low level of risk.

They are a good option for those who want to earn more interest than traditional savings accounts without taking on too much risk.

Certificates of deposit (CDs)

Certificates of deposit (CDs) are time deposits offered by banks that pay a fixed interest rate for a specified term, ranging from several months to several years. They're FDIC-insured up to $250,000 per depositor and offer higher interest rates than regular savings accounts.

CDs are an excellent option for those who can commit to leaving their money untouched for a set period in exchange for higher returns.

Earn up to a $300 bonus and grow your money with up to 4.00% APY

This powerful combination checking + savings account from SoFi® allows you to earn up to a $300 bonus with direct deposit and grow your money with up to 4.00% APY.⁴ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/2026. Full terms at <a href="http://sofi.com/banking">sofi.com/banking</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members with Direct Deposit can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the 4.00% APY for savings (including Vaults). Members without Direct Deposit will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of Dec. 3, 2024. There is no minimum balance requirement. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a>

This is one of the top accounts we’ve seen, and offers like this can be rare. You work hard, and now it’s time to make your money work for you — with SoFi, you can grow your money with hardly any effort!

SoFi has no account or overdraft fees⁵ Overdraft Coverage is limited to $50 on debit card purchases only and is an account benefit available to customers with direct deposits of $1,000 or more during the current 30-day Evaluation Period as determined by SoFi Bank, N.A. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Members with a prior history of non-repayment of negative balances are ineligible for Overdraft Coverage. and additional FDIC insurance up to $2 million on deposits is available through a seamless network of participating banks.⁶ We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at <a href="http://sofi.com/legal/banking-fees/">sofi.com/legal/banking-fees/</a> ⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/terms">SoFi.com/banking/fdic/terms</a> See list of participating banks at <a href="http://sofi.com/banking/fdic/receivingbanks">SoFi.com/banking/fdic/receivingbanks</a> Plus, you can receive your paycheck up to 2 days early.⁸ Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

How to earn up to $300: Sign up and make a direct deposit within the first 25 calendar days of the promotional period, then collect a $300 cash bonus with a direct deposit of $5,000 or more.

SoFi is a Member, FDIC. ⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/terms">SoFi.com/banking/fdic/terms</a> See list of participating banks at <a href="http://sofi.com/banking/fdic/receivingbanks">SoFi.com/banking/fdic/receivingbanks</a>

Open your SoFi account and set up direct deposit

Stocks

While stocks are riskier than the other options listed, they can provide significant long-term growth potential. For example, a well-diversified portfolio defined by the S&P 500 has outperformed cash by 11% on an annualized basis since 1950.

Investing in a diversified portfolio of stocks, especially through index funds, can help spread risk and increase the chances of earning higher returns over many years.

Bottom line

Exploring alternatives to traditional bank accounts can help you earn higher returns and achieve better financial outcomes.

Numerous options exist to grow your savings while managing risk, from government-backed securities to corporate bonds and money market funds.

What alternative investment option will you explore next to optimize your cash and work toward a stress-free retirement? Checking your financial health regularly and considering a diversified approach can ensure you make the most of your hard-earned money.

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Money market mutual funds (MMMF)

Money market accounts

Treasury notes

Get a free stock valued between $5 to $200

Treasury bonds

Treasury bills

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FDIC-insured sweep accounts

Corporate bonds

Short-term bond funds

Certificates of deposit (CDs)

Earn up to a $300 bonus and grow your money with up to 4.00% APY

Stocks

Bottom line

Lucrative, Flat-Rate Cash Rewards

Wells Fargo Active Cash® Card

Wells Fargo Active Cash® Card

Current Offer

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Benefits

Drawbacks

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Wells Fargo Active Cash^® Card

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