1. Short-Term Savings Accounts (0%-2%)
What are they?
CDs, bank savings, and money market accounts
What are the risks?
There are questions about whether uninsured money market mutual funds can maintain their $1-a-share value, thus, explicit federal government guarantees, such as on government securities and FDIC-insured accounts and CDs are more valuable. Also, if inflation rate is above interest rate, your money's purchase power will diminish.
Examples
a. Online bank saving accounts usually offer higher rates
b. IShares Short Treasury Bond (SHV)
c. T-bills from government directly: treasurydirect.gov
d. Money market accounts
In next blogpost, we will show you Municipal Bonds which will offer slightly higher yields.