Advisors say there are several good options, each with its own pluses and minuses.“ Yields on cash-like investments have pulled back from their recent peak, but they remain well above their average over the past decade,” says Brian Therien, an analyst at Edward Jones in St. Louis.

One example is Treasurys.“ T-bills offer 4.3 % for three months [ and ] 4.2 % for six months,” says Eric Lutton, chief investment officer at Sound Income Strategies in Fort Lauderdale, Fla.

But bonds aren’ t liquid. Some clients won’ t want to tie up cash in a bond— even a short-term one— when there are more liquid choices for generating solid yields, Lutton says, such as ETFs that hold investment-grade debt. They offer competitive yields with greater liquidity than owning the bonds directly.

Another good option is to move cash to a money market fund through a brokerage account rather than a bank, since the payouts on the brokerage versions are significantly higher( if not quite as safe) and it’ s easier to shift to stocks from them. As of early April, money markets yielding 4 % or higher were not hard to find, while inflation remains under 3 %, notes Peter Crane, president of Crane Data in Westborough, Mass.

But money markets have a few drawbacks. First, the withdrawals can take a day or two or longer to be processed. You can’ t just go to one as if it’ s an ATM and take out cash, even if you really need it. Second, money markets aren’ t backed by FDIC insurance. The principal value could theoretically be lost( however unlikely that is).

As of early April, a six-month CD with a minimum initial deposit of $ 500 could pay out as much as 4.20 %, according to Bankrate.

Clients skittish about those things might prefer high-yield savings accounts from a bank, which are insured by the FDIC for up to $ 250,000 per person per bank. The top rates on these tend to be offered by online banks. According to Bankrate, the highest yielding accounts as of early April were yielding 3.70 % to 4.30 %.

But many high-yield savings accounts require a high minimum investment. They may also have high monthly maintenance fees, particularly for smaller balances. Moreover, the high payout rates are not guaranteed to last, Crane says. The yields tend to move in lockstep with changes in the Fed’ s short-term interest rates.“ While high-yield savings accounts are often temporarily higher, over time money market funds almost always outperform any type of savings account,” he says. Other clients may prefer CDs, which might guarantee a rate that’ s even higher than a high-yield savings account. As of early April, a six-month CD with a minimum initial deposit of $ 500 could pay out as much as 4.20 %, according to Bankrate.

The downside, however, is that your client’ s money will be tied up for the length of the CD term. Early withdrawals incur fees and penalties. And, of course, investors will lose out if prevailing interest rates happen to rise.“ I would not lock in cash in a CD just yet,” says Alvin Carlos, founder of District Capital Management in Washington, D. C.“ Given a renewed inflation threat from tariffs, the Federal Reserve will likely keep interest rates high.”

Some advisors prefer CDs sold through

10 | FINANCIAL ADVISOR MAGAZINE | MAY 2025 WWW. FA-MAG. COM