How to decide whether to invest excess savings or keep them in an HYSA
Keeping excess savings in a high-yield savings account preserves cash for near-term goals like a house purchase, but leaves surplus funds earning less than they could in the market. Deciding where to allocate this money requires balancing a guaranteed return for upcoming expenses against the risk of missing out on long-term growth for unallocated cash.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
- 1splitting monthly surplus between a Roth IRA, a high-yield savings account, and day-to-day accounts
- 2maintaining a large cash balance in a high-yield savings account
- 3Opening a brokerage account to buy index funds automatically on a weekly basis
- 4Contributing to a Roth or traditional IRA to manage tax advantages
- 5chasing rates across different banks
- 6investing in treasury ETFs like SGOV or money market funds
- 7accepting lower rates to keep the bucket feature
- 8Placing extra money into a high-yield savings account for liquidity
- 9Making extra principal payments to save on interest
- 10Using a mortgage recast after accumulating enough cash
- 11Using the raise as an inflation adjustment across existing budgets
- 12Splitting the raise evenly between treating yourself with a vacation and investing the rest
- 13Adding 1% to retirement contributions and enjoying the remainder
- 14Allocating half to retirement accounts and putting the rest into sinking funds
- 15Consulting the Bogleheads prioritizing investments wiki chart
- 16Following the personal finance subreddit wiki prime directive
- 17Prioritizing high-interest student loan payoff before investing heavily
- 18Leaving excess funds in checking or high-yield savings accounts
- 19Maxing out available retirement accounts like SEP and IRAs
- 20Putting monthly savings into a high-yield savings account to maintain liquidity
- 21Investing in T-bills through TreasuryDirect for a higher yield and state tax exemption while keeping funds relatively liquid
- 22Asking for advice and personal experiences from online forum communities
- 23Comparing historical returns of index funds against real estate appreciation and rental income
- 24Calculating mortgage interest rates against potential market yields
- 25parking cash in a low-yield savings account
- 26reading common personal finance topic wikis
- 27Leaving money in a High-Yield Savings Account (HYSA)
- 28Investing in Certificates of Deposit (CDs)
- 29Allocating money toward mental health treatment
- 30Putting money into a CD based on advice from a banker
- 31Investing in diversified index funds like VT or FSKAX
- 32Choosing dividend ETFs like SCHD, VIG, or JEPI
- 33Selecting growth-oriented options like VUG or QQQ
- 34Using a blended 60/40 portfolio allocation
- 35Selecting a target date fund
- 36Considering real estate investments with family guidance
- 37Exploring the possibility of renting out properties
- 38Splitting the difference with a compromise of 9 or 10 months of expenses
- 39Prioritizing marital peace over the opportunity cost of extra invested cash
- 40Keeping an oversized cash reserve solely for peace of mind and anxiety reduction
- 41Putting everything into a single broad fund like VTI or VT
- 42Combining 85% VT with 15% FSELX
- 43Keeping cash in a checking account to avoid missing bills
- 44Moving cash into money market funds like SPAXX
- 45Investing in index funds through a Roth IRA
- 46Building up emergency funds first and waiting until finishing school and securing a higher-paying job to tackle loans.
- 47Checking loan servicers for interest rate reductions or waiting for potential future federal loan forgiveness and rule changes.
- 48Keeping cash entirely in a high-yield savings account
- 49Lump-sum investing or dollar-cost averaging into the market
- 50letting money sit in a debit account
- 51trying to teach oneself financial management without parental guidance
- 52considering switching to online banking platforms like Sofi
- 53Reading financial wikis and beginner investing books like The Simple Path to Wealth
- 54Investing in low-cost S&P 500 index funds
- 55Holding cash in a money market account
- 56Dollar cost averaging cash into index funds over time
- 57Making a lump sum investment into stocks
- 58Considering purchasing a property to rent out
- 59Leaving money sitting in a checking or high-yield savings account
- 60Setting up automated weekly investments into index funds like SPY or JEPQ
- 61Using automated robo-advisor platforms like Fidelity Go
- 62Reviewing the Prime Directive in the personal finance wiki
- 63Looking up the company online
- 64Consulting Reddit communities and wikis for guidance
- 65Investing idle cash into treasury accounts via platforms that allow quick withdrawals.
- 66Keeping money in Wealthfront earning 3.30%
- 67Looking into certificates of deposit (CDs) offering around 3.80%
- 68Following community wiki flowcharts and guidelines
- 69Maxing out tax-advantaged accounts like 401k, IRAs, and HSAs
- 70Putting remaining funds into standard brokerage accounts using broad market index funds
- 71leaving money in funds with lagging yields to avoid administrative friction
- 72waiting to see if fund yields catch up naturally
- 73leaving old retirement accounts open
- 74contributing to new employer options with matching
- 75depositing money into a 403b retirement plan
- 76sitting on it in a checking account
- 77Keeping everything in checking and relying on discipline not to spend
- 78Manually transferring excess funds into a brokerage or high-yield savings account
- 79Setting up automatic split direct deposits from an employer into various funds
In their words
Unedited, most upvoted first, each linked to the thread it came from.
“How do you actually pick a small business savings account for runway?”source ↗
“Series A is still a ways off and I want idle cash actually doing something. Not sure if yield or FDIC coverage matters more at our stage.”source ↗
“My question is, what is the best place to put this cash for continued growth once the CD term expires?”source ↗
“It's personal. I'm in a very turbulent industry and am the sole breadwinner in a 2 kid household - so I keep 100k. I need that to feel secure in the event of a layoff.”source ↗
“However, we disagree on how much to keep in a liquid HYSA. We have $41k there now which i think is plenty, if not a bit excessive. He wants $80k as a rainy day fund, mostly as a stress reliever.”source ↗
“He says that market could crash and bc of immigrant mentality, he would sleep better with a better safety net.”source ↗
“Would it be best to leave around 60-70k liquid for expenses/schooling?”source ↗
“Should I invest a bulk difference into the market or spread it out into the market over the next few months?”source ↗
“is there something better right now?”source ↗
“I have had parts of my portfolio in short term T-bills (1 to 6 month) and SGOV and VMFXX. A while back the rates were pretty close. But I noticed recently that the T-bill rates have gone up while SGOV and VMFXX haven't gone up nearly as much.”source ↗
“Will the latter two go up eventually? Is it worth shifting some money to T-bills? The difference is not huge so I don't want to be jumping around, but if it stays that way a shift might make sense. Ideas?”source ↗
“I always get so worried about where to put my savings I end up letting it sit there.”source ↗
“Neither of my parents are financially responsible so i’ve been trying to teach myself but I feel stuck what would the best financial moves to make with where my finances are at right now.”source ↗
“I'm curious if I should leave an emergency fund in the HYSA and invest the rest of it in something to put that money to use and work it harder than my HYSA, or just keep it in there for now since I'm working towards buying a house in my early to mid 30's.”source ↗
“I have no clue what to do with money once I have it.”source ↗
“In 1.5-2 years after that is paid off what is my priority?”source ↗
“Once these loans are gone, where should I be looking (401k, Trad/Roth IRA, Brokerage, etc)”source ↗
“I'm going back and forth on whether we should put all our monthly savings toward extra principal payments since its a guaranteed 6.75% return.”source ↗
“On the other hand we need the proceeds from our current home to purchase our next home anyway, so why not just put all of our savings towards the principal?”source ↗
“I have $4,000 to invest for the long term. My risk tolerance is low, but I’m willing to take some risk for potential growth.”source ↗
“What percentages would you put into VT, FSELX, FXAIX, and VTI or put it all in VTI?”source ↗
“I’m not sure how much to put towards the home fund and/or the student loans.”source ↗
“I’m looking for some guidance on where to put my extra money from my paychecks.”source ↗
“I feel like I’m not optimizing my money right now.”source ↗
“What should I usually look for in high-yield savings accounts if not rates? Sorry, I’m the greatest when it comes to finance”source ↗
“With this “extra” money in our checking account and moving forward where should we be parking this.”source ↗
“We got a late start due to life circumstances but we are trying to catch up smartly while still allowing ourselves a bit of room to enjoy some of what we are making now after so many years of financial strain.”source ↗
“We'll look into this. Thank you!”source ↗
“We have a single income house and a very conservative emergency fund of $100k... From then on we decided we’d always keep a large emergency fund and I’ve slept better for it.”source ↗
“Not sure if it’s worth keeping money in my checking account”source ↗
“I was thinking why not do that so I don’t get tempted to spend a bunch of money on random things but I wanted to know more about how these accounts grow money”source ↗
“I mostly want to be able to just keep enough since I tend to buy random things I don’t need without realizing I should save”source ↗
“Now I’m unsure what to do. Do I fully port that into something??”source ↗
“So my question is do I buy a house now and rent it out maybe buy a a home with a legal apartment and rent both out or do I just invest the 100k unit stocks.”source ↗
“I’m lost and I feel like I’m just burning my potential earnings.”source ↗
“Yea that was my issue is I always thought I was going to buy a house.”source ↗
“Do you have a cadence of how much I should invest weekly/ monthly. Like maybe keep 30k in the money market and then slowly port the rest of the 72k over to vanguard at at $2k a week or something ? To try and average the cost out idk”source ↗
“I’d like to start contributing again to something beyond my guaranteed pension plan since I’m able to do it again.”source ↗
“Any advice?”source ↗
“Hello! Am in my mid-20s and I'm currently in my gap years before applying to med school. I currently am depositing some of my money into a 403b retirement plan, but was wondering if it'd be worth it to open up a Roth IRA? I currently making about 1000 dollars bi-weekly once taxes/insurance/403b is deposited. But I do have money sitting in my checking account, so I was wondering where I should start...”source ↗
“Another option would be to open a CD? Or maybe a savings account?”source ↗
“Right now I don't need it, but when I live on my own when I go back to school, I'd need it more accessible for day to day funds.”source ↗
“I deposited money into my 403b since the place I work matches the amount at the end of the year, but was wondering if Roth IRA would be worth it as well?”source ↗
“My savings plan has always been “just don’t spend money”, and it’s worked out very well, but it also means I haven’t had a set pot of money that is just savings.”source ↗
“On one hand, my current system isn’t broken, and I’m worried that trying to fix it will cause issues. On the other, I feel like I’m missing out on bonuses from the high yield account, and I wonder if having a dedicated savings bucket would help me make more informed decisions about big purchases.”source ↗
“What is the best way to go about this extra $2k/mo? I dont have any debts and the next major expenses in my future are house renovations (another want not a need) and a new car to replace my beater.”source ↗
“I’m currently using American Express, but their APY has dropped significantly since I signed on. I’d prefer something with buckets so I’m able to separate all my money properly”source ↗
“I was initially planning to put some extra money into a HYSA, but recently started considering doing extra principal payments since my rate is higher, but my only concern is if the housing market dips.”source ↗
“Just got a raise … save it or spend it?”source ↗
“Should I upgrade my lifestyle? Save for an unplanned vacation? Blow it? What would you do?”source ↗
“I have 85k usd cash. I am not sure whether to upgrade our primary house or buy another apartment and put it on rent or put the money into index funds.”source ↗
“Anyone who has faced similar situations and what choices did you make and how did it workout for you?”source ↗
“I am parking it in a 3% savings account procrastinating that I will invest in a 10% investment option it's been sitting like that for may be 2 years.”source ↗
“I completed will be in US for 2 more years and will go back to india if things are good. Else need to leave earlier than that. I don't know where to invest for decent returns.”source ↗
“I am just scared of markets right now”source ↗
“Right now I want to get into other investment portfolios but am not sure which is the best one for someone who has some money but is not working and does not have a monthly influx of income by any means.”source ↗
“I have about 40-45K saved up, and I've been thinking about what to do with it.”source ↗
“I'm mostly focused on college to increase my income but I'm just unsure what to do with the money.”source ↗
“I recently became a mother and would like to start managing my money more wisely, especially for the long term.”source ↗
“At the moment my investments are down around 0.34%, which made me realize I should learn more before investing larger amounts.”source ↗
“What advice would reddit personal finance give to someone that has $50,000 to invest so that it grows and in twenty years become something that perhaps I can have something for retirement?”source ↗
“Just don't want to drop it in the wrong place mainly and would very much like to be more conscious of these decisions.”source ↗
“I’m about to turn 26 years old, I have no idea how to invest my money or what to do with it.”source ↗
“I feel like I just let my money sit around and do nothing mostly and I want to make it work and make more for me.”source ↗
“What else should I be doing to plan for my future? Is my weekly investment setup good?”source ↗
“That leaves me with approximately $3,500 each month. How should I divide this amount between saving and investing.”source ↗
“I had planned to invest the money but I wasn’t sure where or how. I know almost nothing about investing.”source ↗
“The representative that was helping me with this has recommended that I invest a certain amount with them.”source ↗
“By the end of this month I should have no debt. I’d like to enjoy the holidays a bit and go on a vacation. But next year I want to invest alllll my income minus, rent and utilities. What’s the best way to do this?”source ↗
“After taxes and bills, I should have an extra 10-12k per month to invest. However I don’t know where to put it, what would you do?”source ↗
Where this came up
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