Right now, I have about $25,000 sitting in a high-yield savings account earning 4.50% interest. If I lost my income tomorrow, that cash pile would help cover my family's bills, groceries, and other expenses without going into debt.

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But is it enough to protect me in a recession? What's the ideal savings number to help us ride out a lengthy rough patch?

A six-month buffer is ideal

If you lost your job today, how long would it take to find another one?

In a strong economy, it could be fairly quick. You might land a new gig within a month or two, or pick up some freelance or side work to keep money flowing.

But during a recession, when layoffs spike and hiring slows, finding work could take much longer.

In fact, during the 2007-2009 Great Recession, the median unemployment period was 25.2 weeks (nearly six months), according to the Bureau of Labor Statistics. And when jobs are scarce, even gig work can dry up.

That's why personal finance expert Robert Brokamp recommends folks lean toward a larger savings cushion:

Basically, saving six months of expenses gives you more time to find a job if the economy goes south.

Here's what six months of savings looks like at different spending levels:

Where to keep your emergency savings

This part matters more than most people think.

Keeping your emergency fund in a safe place that's easy to access is important. But you also want to earn maximum interest on your cash.

That's why a high-yield savings account (HYSA) is the best spot. HYSAs earn about 10 times the national average APY. And today's top accounts are offering rates up to 4.40%.

HYSAs are also FDIC insured, up to $250,000 per depositor. So you can relax knowing your money is federally protected, even if the bank you're with goes out of business.

A barebones budget can help

My wife and I usually spend about $6,000 to $7,000 per month. So, at our normal spending rate, our $25,000 emergency fund would last us around three to four months.

But here's the thing. If I actually lost my job and couldn't find work right away, we could tighten up our spending quite a bit. We could pause travel, cut subscriptions, and put a temporary freeze on non-essentials. That would shrink our monthly spending significantly, maybe to $4,500 per month. Our emergency fund would last us closer to six months then.

This stripped-down version of our expenses is called a barebones budget. It's a super useful tool to have in your back pocket.

Pro tip: Some banks offer built-in budgeting tools that help you track your spending and flag unnecessary expenses that can be cut fast.

Tips to build up your recession fund faster

If you don't have a full six months of savings currently, here are a few moves that can get you there faster:

1. Set up automatic transfers. Each payday, move a bit of money from your checking account into savings. Then you'll be stashing money without even thinking about it.
2. Save any windfalls. Bonuses, tax refunds, or birthday cash from grandma…put it all right toward your savings goal.
3. Cut back temporarily. Skipping one dinner out per week could save you $200 a month or more. Believe me, the sacrifice will be worth it when you're sitting on a full emergency fund.
4. Get the highest APY you can. Park your savings in an HYSA with one of the best available APYs. All that interest helps your fund grow faster.

Progress feels slow at first, but momentum builds fast.

Recessions are unpredictable. Having a solid cash cushion means you don't need to panic-sell investments or swipe a credit card when life gets rocky.

So whether your number is $5,000 or $50,000, start stacking that fund today. The peace of mind is worth every penny.

No one ever regrets having extra cash in a crisis. Explore the top high-yield savings accounts today and start earning up to 4.40% APY, with zero risk and full liquidity.

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My wife and I became millionaires fairly early in life. And while you might think we won the lottery or were early crypto adopters, the truth is painfully unsexy…

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We just started automatically investing a portion of every paycheck, stuck with it, and let time do the rest.

That one habit changed everything for us. And it's the exact same step I recommend to literally anyone who wants to retire wealthy.

How a tiny investment grows into $1 million

One of the biggest complaints I hear people saying is, "I can't save very much."

But what they don't realize is how little amounts can grow to massive numbers over time. It's all due to compound interest.

Here's an example using $300 per month. If you invested each month with an 8% average annual return (a common long-term stock market estimate), here's how it would grow over time:

That's just ten bucks a day. And if you can double that savings to $600 per month, you will double all those future values.

You can start with even less. The habit matters more than the amount. Over time, as you earn more or have more breathing room, you can increase your contributions.

Even better, automate your investments. If money goes straight from your paycheck to your 401(k), you'll never have a chance to spend it -- and you probably won't miss it.

Not sure how to get started? With our partner, SmartAsset, you can get matched with up to three fiduciary advisors so you can get professional advice.

Best "set-and-forget" investing accounts

If you want to build wealth on autopilot, these accounts make it easy to invest consistently and forget about it until retirement.

401(k): Invest straight from your paycheck

If your job offers a 401(k), that's usually the easiest place to start. Money gets taken out of each paycheck and invested before it even hits your bank account. Plus, many employers offer a match -- and that's free money.

A Roth or traditional IRA

A Roth IRA is great if you're still in a lower tax bracket, because withdrawals in retirement are tax-free. A traditional IRA gives you a tax deduction now, but you'll pay income tax on your withdrawals later.

Either way, IRAs are simple to set up and perfect for building that automatic investing habit. Open your first IRA with one of these top-rated brokers.

A regular brokerage account

I encourage everyone to prioritize their 401(k)s and IRAs, because they have tax advantages and are built for retirement saving. But if you've already maxed those out, go with a standard brokerage account.

No matter what account you invest in, make sure to set up those recurring transfers.

If you're consistent, the wealth will show up. Maybe not tomorrow, maybe not next year. But eventually compound interest will kick in and take over -- just like it did for me and my wife.

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Think for a second: How do you win a game of Monopoly?

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Do you circle the board as fast as you can, refusing to buy anything, and only focus on stacking up cash?

Of course not. You buy properties. You invest early and get your hands on as many assets as possible. It's a race to build hotels and collect income. The players that buy nothing and hoard cash? They lose.

Well, the same idea applies to retirement and real life. Saving is crucial. But investing is what builds real wealth.

Why saving alone won't get you there

Let's say you save $500 per month, and put all of that money into a checking account at the bank. Do you know how long it will take to save up $1 million?

It will take 166 years. Not kidding.

Simply stashing money in a bank account makes it incredibly difficult to reach your retirement goals. But when you invest your money and activate compound interest, your wealth grows like a snowball.

Now let's look at what investing can do with $500 per month. Instead of saving in a checking account, let's say you invest all those dollars in a 401(k) or IRA. With an 8% average annual return (I'll explain why I chose this rate later), reaching that $1 million would only take 35 years.

That's a difference of 131 years!

You can even reach $1 million much sooner, by either saving more or getting a higher return on your investments. The reason I used an 8% annual growth rate is because it's a conservative estimate, slightly below the S&P 500 Index's long-term average of about 10%.

By the way, if you're confused about all this investing stuff, it never hurts to connect with an advisor. A short questionnaire from our partner, SmartAsset, helps match you with up to three fiduciary financial advisors, each legally bound to work in your best interest.

Automate everything

One of the best money moves I ever made was automating my retirement contributions.

Every paycheck, a little bit of money gets transferred into my investment accounts, without me ever having to think about it. And over the years, those small, consistent deposits have quietly grown into big balances.

If your workplace offers a 401(k) plan, start there. And if they offer a match, grab it! That's free money. Another easy option is opening an IRA and scheduling monthly transfers.

Experts recommend saving 10% to 15% of every paycheck. But honestly, I encourage people to save even more if they can.

Keep it simple with index funds

I'm a huge fan of index funds. These are low-cost funds that track big chunks of the market, like the S&P 500 Index.

That means when you invest in one fund, you instantly own shares of hundreds of companies -- without having to pick and choose.

Another easy setup is target-date retirement funds. They're like all-in-one portfolios that invest your money in a mix of stocks and bonds, and automatically adjust that mix as you get older.

And if you want a completely hands-off experience, it might make sense to work with an advisor. This no-cost quiz from our partner, SmartAsset, makes it easier to find a fiduciary financial advisor.

Go build your Monopoly board

Saving for retirement is a long-term game.

Just like collecting properties in Monopoly, the key is to keep stacking assets over time. Those investments will start paying dividends, growing in value, and snowballing into real wealth.

To make it easier, set your contributions on autopilot. This makes investing a habit, so all of your dollars are working hard while you continue living your life.

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Some of the top CDs are paying well over 4.00% APY right now -- a rare treat if you've been stuck earning pennies in a basic savings account.

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But with the Federal Reserve hinting at rate cuts later this year, you might be wondering: Should you lock in today's high rates? Or is it smarter to keep your cash flexible?

Let's break down the latest CD rates, a smart strategy for investing in CDs, and how high-yield savings accounts (HYSAs) stack up today.

Best short-term CD rates in May 2025

Right now, short-term CDs are offering higher yields than their longer-term counterparts.

Here's how the top shorter-term CD rates stack up as of May 2025:

If the Fed lowers rates soon, we'll likely see these rates drop quickly. So if you've got cash you don't need for the rest of 2025, it might make sense to lock in a great rate while you can.

Explore all the top CDs of May 2025 to see the latest high-rate options before they disappear.

A CD ladder can give you more flexibility

If you're worried about locking up cash for too long, CD laddering can be a good strategy.

It works like this:

• Start by splitting your money into equal parts. For example, you might split $20,000 into four lots of $5,000.
• Next, open several CDs with staggered terms. For example, one for 6 months, one for 12 months, one for 18 months, and another for 24 months. Put $5,000 into each.
• As each CD matures, you can either cash it out if you need the money, or roll your funds into a new long-term CD to keep the ladder going.

Laddering allows you to lock in today's great rates, but gives you regular chances to change your strategy (or lock in higher rates if they come available).

If you're building a ladder, short-term CDs are your best building blocks right now thanks to their higher APYs.

High-yield savings accounts are great too

If locking up your money makes you nervous, a high-yield savings account might be a better home for your cash.

Right now, the best online HYSAs are paying around 4.00%, which is only slightly lower than what you can earn with short-term CDs.

The main downside is: HYSA rates are variable. If the Fed cuts rates, your savings rate will follow suit, unlike your CD rate that's locked in.

Personally, I keep about $25,000 in an HYSA. For me, it's worth a little less yield to know I can access my cash instantly if something unexpected comes up.

Don't miss today's high rates

CDs are absolutely still worth considering in May 2025 -- but only if they fit your savings timeline. If you can afford to lock your money up for between six and 18 months, CDs paying over 4.00% could be an awesome low-risk win.

But if you need fast access to your money, a high-yield savings account is the safer, smarter play.

Either way, don't let your cash sit in an account earning 0.01%.

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Whenever I get a new credit card, the first thing I do is set up auto-pay.

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It's a no-brainer -- it guarantees I'll never miss a payment by accident, and the bank just pulls the money straight from my checking account.

But choosing the wrong auto-pay settings (or just accepting the bank's default) can cost you big time. If you're not careful, you could end up only paying the minimum due -- while the rest of your balance racks up interest.

Here's how to make sure auto-pay is actually working for you.

Understanding your auto-pay options

When you set up auto-pay, most banks offer a few choices:

• Pay the minimum payment (usually 1% to 3% of your balance)
• Pay the statement balance (everything you owed last billing cycle)
• Pay the current balance (everything you owe up to that time)

If you're not paying attention, it's really easy to choose "minimum payment." But this means over 95% of your statement rolls over to the next month. Next, interest is charged, typically compounding daily, and things get ugly real quick.

Best practices when setting up auto-pay

Here are a few tips for when you set up auto-pay:

1. Choose "pay statement balance" (if possible). This pays off what you owed last cycle, on time, every time. You'll avoid paying any interest, and you don't need to pay for today's new purchases yet.
2. Set up "pay current balance" if you're a heavy spender. This will pay everything you owe -- including recent charges -- so you're fully caught up. As a side benefit, this keeps your credit utilization as low as possible, which helps your credit score.
3. Double-check your bank's default setting. Before finalizing, make sure you're not accidentally locked into minimum payments.
4. Set a reminder a few days before due dates. Even with auto-pay, it's smart to eyeball your checking account balance and make sure you've definitely got the funds to cover your payment.

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What happens if you only pay the minimum

Here's an example of the consequences of only making minimum payments:

My wife and I usually put about $3,500 a month on our credit cards. Let's say we only paid the minimum -- maybe 2% of the balance, or about $70.

The rest of the balance would roll over and start racking up interest. My credit card APR sits at about 22% right now, so this means I'll pay $63 in interest the first month.

And if we kept rolling that balance over without paying it off? We'd fork over hundreds -- even thousands -- of dollars in interest over the course of a year (while also racking up a ridiculous balance!)

Smart habits, bigger wins

Setting up auto-pay the right way isn't just about avoiding late fees.

It's a key part of building smart credit card habits. Responsible usage keeps you out of debt and puts you in full control of your cash.

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A friend of mine said the safest money move right now is to buy Bitcoin. I nearly spit out my coffee!

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If you're looking for actually safe places to park your money -- the kind with predictable returns and no emotional rollercoaster -- this list is more your speed.

Here are four smart places to stash your cash (no crypto required).

1. High-yield savings accounts

These are like regular savings accounts -- but earn up to 10X the national average interest rate.

High-yield savings accounts (HYSAs) are FDIC insured, and right now can be found with rates as high as 5.00% APY.

But for example purposes, we'll use a more common APY of 4.10% for our calculations. To put this into dollars, here's what earnings could look like after 12 months at various balances:

Unlike my buddy's Bitcoin, there's zero risk to your principal. With FDIC insurance, your money stays safe. Even if the bank goes under, you're protected up to $250,000 per depositor, per institution.

HYSA rates do ebb and flow with the economy and Federal Reserve changes. But movement is slow and often predictable.

2. Certificates of deposit (CDs)

CDs are like the "set it and forget it" crockpot of saving. You lock in a great rate, walk away, and come back to guaranteed growth.

In May 2025, short-term CDs (3- to 12-month terms) are offering rates around the 4.00% mark, with some online banks offering up to 4.65% APY. These are ideal if you anticipate needing access to your funds in the near future.​

On the other hand, you might prefer locking your money in for a longer term and accepting a slightly lower rate. Mid-term CDs (1 year to 3 years) are yielding between 3.25% and 4.00% APY. Locking in these rates now can be a smart move, especially if interest rates decline in the coming months.​

Keep in mind that CDs do come with early withdrawal penalties. So, choose a term that aligns with your financial goals and timeline.

3. Treasury bills (T-bills)

T-bills are like super-safe IOUs from the U.S. government. You give them money now, and they promise to pay you back later, with interest.

As of May 2025, short-term T-bills (three to six months) are yielding around 4.30% APY.

How they work: You buy T-bills at a discount (say, $975), then get the full $1,000 back when they mature in a few weeks or months. That difference is your interest.

One cool thing about T-bills is that the interest you earn isn't taxed at the state or local level -- you only pay federal taxes. This is a big win if you're in a higher tax bracket.

You can buy T-bills straight from TreasuryDirect.gov, or invest through a brokerage.

4. Money market funds

Imagine taking CDs, T-bills, and other super-safe investments and smooshing them together into one big fund. That's basically what a money market fund is.

You get to spread your risk across many different short-term assets, and reap the blended yield of everything.

In May 2025, many money market funds are paying between 3.45% and 4.24%.

Something to check with your current broker: Many firms automatically "sweep" your uninvested cash into one of these funds. This is a great feature to earn the most on your cash while it's sitting idle.

Read all about one of our favorite brokers that does this and learn how its low fees and simple approach make it a great choice for protecting your savings.

Keep it boring (and safe)

If you're like me -- and not taking financial advice from your Bitcoin-loving buddy -- then you know that boring and proven methods are a better way to keep your cash safe.

HYSAs, CDs, money market funds, and T-bills all offer steady, low-risk returns that won't keep you up at night.

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Just like Barry White says, "Too much of anything ain't good for you, baby." And yep -- that even applies to hanging onto too much cash. If you've got over $50,000 sitting in the bank, it's time to rethink your financial game plan.

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Keeping some cash savings is smart -- like three to six months worth of expenses in an emergency fund.

But hoarding excess cash could actually be hurting you and costing you thousands of dollars every year.

Saving vs. investing

A lot of people use the terms "saving" and "investing" like they're the same thing. But there's actually a big difference.

• Saving is for short-term goals and emergencies. Think: your emergency fund, a vacation next year, or a new car. This money needs to be kept in cash for quick access.
• Investing is for long-term goals. Think: retirement, growing wealth, or sending your future kid to college. This money should be invested, and not touched for decades.

Both are important. And balance is key.

How much cash should you be holding?

The general rule of thumb: You typically want three to six months' worth of essential expenses in an emergency fund.

If you're saving up for a home down payment, or large purchase in the next few years, that money can be kept in cash too.

But, while it's sitting idle, it should be earning maximum interest.

I use a high-yield savings account to keep my $25,000 emergency fund handy and secure. Right now I earn an APY of 4.50%, which will make me over $1,000 in interest this year. Not bad!

High-yield savings accounts are FDIC insured, you can withdraw your money at any time, and you'll earn top interest rates.

Where to put your excess cash

Anything beyond your emergency fund can be invested for the long term. Here are some places to put that money to work.

401(k) or IRA:

A 401(k) is typically offered through your employer, while an IRA is something you can open yourself. Both accounts offer powerful tax advantages that can help your money grow way faster than it would in a regular bank account.

Inside of these accounts, you can invest in broad index funds or target date funds. These typically have a low expense ratio, and are highly diversified.

Regular brokerage account

A brokerage account doesn't offer tax advantages. But it does have much more flexibility for investment options, and better access to your money. Inside of a brokerage account you can invest in stocks, ETFs, short-term bonds, and more -- there is a lot of choice.

Investing always carries risk. But if you're patient and learn to invest wisely, the long-term growth can yield mind-blowing results.

Still not sure where to stash your emergency fund? Check out our list of the best high-yield savings accounts for the opportunity to earn more than 10 times the national average rate today.

Pay off debt (high interest first)

Still carrying a balance on a credit card or personal loan? Using excess cash to wipe out debt could give you a "guaranteed return" equal to your interest rate.

For example, if your card is charging 20% APR, paying it off is like instantly earning 20% risk free. Tackling lower-interest debt can be smart too. It's better than having cash sit idle and earning nothing.

The true cost of excess savings

Let's say you're holding an excess $30,000 in cash, on top of your emergency fund.

Here's what growth would look like in these accounts:

• Savings account earning 4.00% APY (typical for today's top HYSAs)
• Investment account averaging 8% annual returns (This is a rough example and actually a conservative estimate based on the S&P 500's history)

Compound interest is wild. A tiny rate difference -- over decades -- makes a massive difference in how much money you end up with. Stop waiting and start making your money work harder for you today.

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At one point, I had over $20,000 sitting in my regular checking account earning just 0.01% APY. That's a whole $2 per year in interest. But you know what happened when I wised up and switched to a high-yield savings account (HYSA) paying over 4.00%? I earned almost $800 for the year.

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This is a common mistake. In fact, a recent survey found 82% of Americans don't utilize high-yield savings accounts. Choosing the wrong type of bank means leaving hundreds -- or thousands -- of dollars on the table.

If you're sitting on a sizable cash pile, here are three common mistakes you should avoid when picking a place to store it.

1. Settling for an ultra-low APY

According to FDIC data, the national average interest rate on a checking account is 0.07% APY. That's not just low -- it's microscopic.

To be fair, checking accounts aren't built as savings vehicles. They're meant for everyday banking and money management.

Meanwhile, for long-term cash storage, online high-yield savings accounts are currently offering 4.00% to 4.50% APY. The difference is huge. Even at 4.00%, you'd be earning nearly 60 times the average checking account APY.

Here's a 12-month comparison:

To do this week: Check your bank statements and see how much interest you earned last year. If it was less than a few dollars, you owe it to yourself to switch to a higher growth account!

2. Overlooking hidden fees

Even if your bank advertises "free" savings accounts, they may be quietly charging:

• Monthly maintenance fees for low balances
• Paper statement fees
• Withdrawal limits or penalties
• Transfer fees between accounts

If your savings are growing by 1%, but you're losing $10/month in fees? That could be a net loss.

Many online banks have no monthly fees, no minimum balance requirements, and free transfers. That means more of your money stays exactly where it belongs -- in your account, working for you.

3. Stashing your savings somewhere that's not FDIC insured

It's easy to assume your money is always safe in a digital account. But that's not always the case!

Many popular payment apps (like PayPal, Venmo, and Cash App) aren't FDIC insured by default. That means if the company goes under, you could lose your money.

Flashy fintech accounts and crypto platforms don't offer the same protections as a traditional bank or credit union.

FDIC insurance means that if the bank fails, you still get your money back. Insurance is up to $250,000 per depositor, per institution.

Don't worry -- ALL of the high-yield savings accounts we love and recommend are FDIC members. Your savings are safe!

Your next smart move

Don't settle for a sub-par bank account -- especially if you have a high balance ($5,000 or more) that could be earning you a decent amount in interest.

Take 10 minutes today to investigate your current savings account. Look for a competitive APY, no sneaky fees, and full FDIC insurance. If it doesn't check all three boxes, open a new HYSA today and get your dollars working harder for you.

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Click here to read our full review for free and apply in just 2 minutes.

We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.Joel O'Leary has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends PayPal. The Motley Fool recommends the following options: long January 2027 $42.50 calls on PayPal and short June 2025 $77.50 calls on PayPal. The Motley Fool has a disclosure policy.

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Most Americans still park their savings in traditional checking or savings accounts earning just 0.07% APY. That means if you have $30,000 sitting in there, it's making about $21 a year. That's less than the price of two movie tickets -- for the whole year.

Looking for a secure place to grow your savings? See our expert picks for the best FDIC-insured high-yield savings accounts available today - enjoy peace of mind with competitive rates.

What people should be doing is keeping their cash in a high-yield savings account (HYSA). With APYs up to 4.40%, that same $30,000 could earn over $1,300 a year, without any added risk.

Let's take a closer look at what you stand to gain by switching to a high-yield savings account.

What $30,000 earns in high-yield savings (vs. traditional accounts)

I've done the calculations for a few different scenarios to show you how much $30,000 would earn over the course of a year in various account types.

Here's a simple comparison based on national average checking and savings account rates, plus a competitive HYSA rate you can find today:

That's a $1,299 difference between a regular checking account and a top-paying HYSA. Nothing to scoff at.

Shopping around for a high-yield savings account

Personally, I was pretty nervous when I first opened an online HYSA. Transferring $30,000 to any new bank requires a bit of research.

Here's what I look for before moving my money:

• A high APY -- Right now, 3.60% and up is the benchmark for competitive rates
• No monthly fees -- Junk fees are a pet peeve of mine
• FDIC insurance -- This protects your cash up to $250,000 per depositor, per bank
• Fast transfers -- You'll want access to your money if you need it quickly

Some accounts may also offer welcome bonuses for new customers! So definitely keep an eye out for those.

Put your money to work today

Checking accounts are convenient. But they're not built for storing cash long term.

If you've got $30,000 sitting in a checking account, it's quietly costing you over $1,000 each year.

Your mission this week: Open a high-yield savings account and put all your hard-earned dollars to work.

Alert: highest cash back card we've seen now has 0% intro APR into 2026

This credit card is not just good – it's so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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With CD yields still hovering in the 4.50% range, you really need to be picky when choosing where to put your cash.

Looking for a secure place to grow your savings? See our expert picks for the best FDIC-insured high-yield savings accounts available today - enjoy peace of mind with competitive rates.

Especially if you're cashing out of an existing CD. If you don't take action when a CD matures, your bank might quietly roll your funds into a new CD -- locking them up again, potentially at a lower rate.

If you're cashing out a CD soon, avoid these top mistakes.

1. Letting your bank auto-renew your CD

Most CDs have something called a "grace period." This is usually a seven- to 10-day window after the maturity date in which you can withdraw your money without penalty.

Guess what happens if you miss this grace period? Banks typically auto-renew your CD -- which may (or may not) be in your best interest.

Even worse: Not all banks send you a reminder!

While auto-renewal isn't always bad, don't assume that it's the best option forward.

What to do instead:

• Set a calendar reminder with your CD maturity date and the grace period window.
• Log in to your account the day it matures and choose "withdraw" or "close CD" (wording varies a little by bank).
• Make a quick decision about the next best place to put your money.

If you want to open a new CD, be sure to shop around for the best available CD rates across all banks.

2. Letting their money sit idle after withdrawal

A lot of people cash out their CD into a checking account, then think, "I'll just wait a few days and figure out my next move later." Then six months slip by and they've missed out on hundreds in earning potential. Don't fall into this trap!

A good practice is to withdraw money directly into an HYSA during the grace period. That way if you don't have an immediate next step lined up, you'll still be earning competitive interest on your cash.

Whatever you do, don't request a check withdrawal and then wait months to cash it. Or cash money out into a low-APY savings account earning pennies. Be proactive and make a plan for earning the most you can, as soon as you can.

3. Reinvesting without rate shopping

If your CD was earning 1.00% or 2.00% when you opened it, things have changed big time since then.

As of April 2025, many high-yield CDs are paying well over 4.00% APY.

Here's a quick 12-month yield comparison, based on a balance of $20,000:

Don't just accept the rates offered by your current bank. Shop around, because there's likely something better available elsewhere.

Want to see the latest rates? Check out our list of the top CDs for April 2025.

4. Cashing out early without understanding the penalty

If your CD isn't quite mature yet, resist the urge to cash out early. That's because banks charge a penalty for doing so -- which means you might forfeit three to 12 months' worth of interest.

Let's say you're earning 5.00% APY on a $10,000 CD and you withdraw three months early. You could lose $125 or more in penalties -- which might wipe out a good chunk of your earnings.

Make your exit count

Cashing out a CD shouldn't be an afterthought. Stay ahead of the due date by researching the best options moving forward and making an action plan.

And definitely don't let your bank auto-renew your CD into a lower rate. There are way better options, and moving that money only takes a few minutes of your time.

Alert: highest cash back card we've seen now has 0% intro APR into 2026

This credit card is not just good – it's so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.Joel O'Leary has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.

Image source: Getty Images

The average checking account earns a measly 0.07% APY. That means if you have $10,000 sitting in your checking account, you'll earn a whopping $7 in interest for the year. Ouch! That can't even pay for a delicious craft Hazy IPA at my local brewery.

Looking for a secure place to grow your savings? See our expert picks for the best FDIC-insured high-yield savings accounts available today - enjoy peace of mind with competitive rates.

High-yield savings accounts (HYSAs), on the other hand, can offer up to 4.40% APY. Interest earned in a year would be over $400… Which would buy me three to four delicious Hazy IPAs -- per month, for a year!

If you have $10,000 or more sitting in checking, it's time to put that money to work in a better type of account.

How much $10,000 could be earning

So, how much could that $10,000 that's languishing in your checking account be earning you elsewhere?

Here's the math comparing interest rates across different account types, at various balances:

With a $10,000 account balance, you're looking at a $441 difference in interest just for moving your money into an HYSA. No investing, no risk. Just smarter saving.

Why most people keep too much in their checking accounts

Most of us were taught that our checking account is the default place for our money. It's where your paycheck lands. It's what your debit card pulls from. It's... easy.

But that convenience leads people to continue to build up savings amounts way higher than they should.

Traditional banks love this by the way. They make billions by keeping their customers' cash sitting in low-interest accounts, and never encourage people to move it.

In reality, there's no need to keep more than one or two weeks' worth of expenses in a checking account. As long as you've got enough to cover immediate bills, any excess cash is probably too much.

What to look for in a high-yield savings account

If you're ready to put your cash pile to work, here are some things to consider when evaluating high-yield savings accounts:

1. Competitive APY: Look for accounts offering 3.60% APY or higher. Rates change often, so it's worth checking every few months.
2. No monthly fees: You shouldn't have to pay to save. Plenty of online banks offer free accounts with no minimums or maintenance fees.
3. FDIC insurance: Make sure your money is protected and you're working with a reputable bank.
4. Easy transfers: You'll want quick access to your cash should you need it to cover large bills or if an emergency pops up. Typical transfer times should be one to three business days.
5. A great mobile app: This makes it easy to quickly log in and manage your money.

Our editorial team has spent hundreds of hours researching, reviewing, and testing the best savings accounts. Check out our best high yield savings accounts for April 2025.

Give every dollar a job

Checking accounts are perfect for daily use. Like for paying bills, buying groceries, and getting your paycheck deposited. But they're not built for growth.

Every extra dollar you have sitting idle, move it somewhere it can work harder for you. A high-yield savings account gives those dollars a job, while also keeping them accessible in case you need the money in a pinch.

Alert: highest cash back card we've seen now has 0% intro APR into 2026

This credit card is not just good – it's so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.