Banking Savings & Money Market Accounts

6 Places to Stash Cash You'll Need in the Next Year

Planning a big expense within a year? Here's where to keep the funds safe.

By Michelle Smith

Edited by Chris Kissell

Updated Nov. 14, 2024

Are you saving money for a big purchase within the next year? Whether you're planning a kitchen renovation, hoping to move across the country, or saving for a family vacation, you don't want to risk spending the cash before you need it.

At the same time, it would be a mistake to lock up the money so tight that you can't access it when you need it.

Luckily, you have several options for securely stashing hard-earned cash, all of them safer than your wallet, mattress, or loose floorboard. Let's dive into the six best places to stash the money you intend to spend within the next year.

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Your savings account

Savings accounts are among the safest places to store cash for future use.

For one thing, the Federal Deposit Insurance Corp. (FDIC) insures the deposits at most banks. The FDIC guarantees that if a banking institution fails, you won't lose the money you've deposited in the bank. Instead, the federal government insures such accounts for up to $250,000.

The National Credit Union Administration, or NCUA, similarly insures deposit accounts at credit unions. The NCUA is a federal institution that functions much like the FDIC.

You could lose any amount over the insurance limit if you store more than $250,000 in a single bank or credit union savings account. But the average American doesn't store nearly that much in their savings account.

Finally, many savings accounts today pay out less than 1% interest. That's not much, but you can make a bit more if you keep your money in a high-yield savings account.

Depending on how much money you store in savings and how high your account's interest rate is, you won't just be storing your money for the future — you'll be making money, too.

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Your checking account

A checking account might be a riskier place to store cash than a savings account if you're unable to control impulse purchases.

But if you keep your spending under control, a checking account could be a solid place to stash the cash you will need within a year.

The FDIC (or NCUA if you bank with a credit union) insures checking accounts for up to $250,000, just as it does with savings accounts.

In contrast to investing in the stock market, opening a checking account ensures you don't need to worry about a market downturn draining your funds.

Unlike savings accounts, most checking accounts aren't interest-bearing. However, a few banks offer around .64% APY (annual percentage yield) on checking accounts.

If you're set on using a checking account to store your savings, an interest-bearing account will help you maximize savings.

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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 4.00% (as of 12/27/24) 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.

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A 1-year CD

Worried you'll be tempted to spend that cash you're saving? If so, lock it up in a one-year certificate of deposit (CD), which functions a bit like a savings account with extra restrictions.

First, CDs typically have a penalty attached if you withdraw the money early, usually equivalent to a few months' interest. You effectively promise your bank that you'll store a certain amount of money with it and won't remove it until the CD's term is up.

So, remember not to purchase a one-year CD if you will need the money within the next 12 months—for example, nine months from now.

Second, in contrast to most checking accounts, you earn interest on a CD. Your interest rate still depends on your bank, term length, and amount of money stored, but you should close out the CD with more money than what you deposited.

If you're saving money to do something fun in a year but still want account access in case of an emergency, a savings account or money market (discussed below) is a better choice than a CD.

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A money market account

Like a savings account, a money market account usually has a higher interest rate than a standard checking account. These accounts typically have higher interest rates than savings accounts, too.

If you have a substantial chunk of cash that you still want to access as needed, you'll probably earn more interest opening a money market account than a savings account.

In contrast to certificates of deposit, money market accounts may include debit cards and check access. However, some banks may limit how often you can withdraw funds from a money market account each month.

Most money market accounts require a higher minimum deposit than a run-of-the-mill savings account. And your interest rate may decline if your balance dips beneath a range set by your bank.

Treasury bills

Investing in the stock market can yield rewards, but it also comes with big risks, particularly in the short term. In contrast, investing in the U.S. government in the form of Treasury bills guarantees that you'll get back the money you invested plus a little extra in interest.

Unlike Treasury notes and bonds, Treasury bills have short terms that range from as low as a few days to as high as 52 weeks. If you want to keep your funds out of sight and out of mind while earning a guaranteed return on investment, a Treasury bill can be a solid choice.

Short-term bond funds

A short-term bond fund is another place to keep money you'll need relatively soon. Short-term bond funds usually contain bonds that mature in less than five years.

In most years, you will earn a modest positive return on a short-term bond fund. As of November 2024, many short-term bond funds have generated positive returns, benefiting from rising interest rates and improving economic conditions.

Bottom line

Saving cash today to use a year down the line is easy and safe, especially if you park your money in an FDIC-backed bank account or Treasury bill.

Depending on the type of account you choose, you even stand to earn a little extra cash, which definitely won't happen if you squirrel away your extra cash in an envelope under the mattress.

Lend your future self a helping hand by assessing your money storage options and putting away some money today.

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SoFi Checking and Savings Benefits

Earn up to 3.80% APY⁴ 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. See full bonus and annual percentage yield (APY) terms at <a href="http://www.sofi.com/banking#1">sofi.com/banking#1</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members who enroll in SoFi Plus with Direct Deposit or by paying the SoFi Plus Subscription Fee every 30 days or with $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 3.80% 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 stated interest rate. Members without either SoFi Plus or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi Plus members are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of Jan. 24, 2025. 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>. See the SoFi Plus Terms and Conditions at <a href="https://www.sofi.com/terms-of-use/#plus">https://www.sofi.com/terms-of-use/#plus</a>. and collect up to a $300 cash bonus with direct deposit or $5,000 or more in qualifying deposits⁵ SoFi members who enroll in SoFi Plus with Direct Deposit or by paying the SoFi Plus Subscription Fee every 30 days or with $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 3.80% 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 stated interest rate. Members without either SoFi Plus or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi Plus members are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of Jan. 24, 2025. 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>. See the SoFi Plus Terms and Conditions at <a href="https://www.sofi.com/terms-of-use/#plus">https://www.sofi.com/terms-of-use/#plus</a>.
No account, overdraft, or monthly fees⁶ 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>
Get your paycheck up to two days early⁷ 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.
Access additional FDIC insurance up to $3 million⁸ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor 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 $3M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/sidpterms">SoFi.com/banking/fdic/sidpterms</a>. See list of participating banks at <a href="http://sofi.com/banking/fdic/participatingbanks">SoFi.com/banking/fdic/participatingbanks</a>.

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Your savings account

Your checking account

Get a free stock valued between $5 to $200

A 1-year CD

Get a free stock valued between $5 to $200

A money market account

Treasury bills

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Short-term bond funds

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