[Nicole]

What would you do?
$155k in a savings account with current 4.40 APY (currently get about $565 monthly in interest)

OR

$145k CD at 5.15 APY for 12 months

Edit to add:

this is money we have saved over the years and do not need it anytime soon as we have a separate savings account that we take from for vacations/home repairs etc

[Chris]

This is a situation where perhaps the wrong question is being asked.
Your husband has an extremely low risk tolerance and that will hurt both of you in the long run.

No risk, no reward.

[Jodi]

I’d put it in a general investing brokerage account. It sounds like you don’t need the money so letting it grow with the market over time is probably going to be significantly more money in the long run

[Rick]

Certificates of disappointment and savings account for long term money? Can you instead move this into investments, vis dollar cost average if needed for emotions?

Long term returns of stocks has been right about 7% over cash (equivalents).

That is a tough trend to fight against.

I wouldn’t.

[Jasmine]

Not sure I’d choose either. Plenty of HYSAs paying 5.25%+ at the moment (see Megan’s link in her comment), so if sticking with HYSA, I go for at least 5.25% right now.

Other options I’d consider are short-term t-bills (paying over 5% and exempt from State tax) and VMFXX if you’re with Vanguard (VMFXX is currently 5.29%).

[Meg]

How are you retirement accounts? I’d shore those up and then invest the rest into a brokerage since you say this money will be used for when you retire.

[Michael]

Maybe this is just me but I wouldn’t waste time splitting hairs over $50 a month when I’ve managed to save $150k in cash?

[Tammy]

If you don’t need the money in the next 2 years, I would invest it or most of it.

Once you have 12-18 month emergency fund, invest the rest.

Close to retirement, I could see increasing the cash savings to 24 months, but any more than that is unnecessarily giving up higher returns.

[Mark]

Neither. Thats too much money for me not to be invested. But of course depends on how much of ur overall portfolio that cash represents

[张扬]

These types of questions typically indicate that you’re hoarding too much cash and should consider investing some of it, especially if you have no short term use for the money.

I would be more afraid of losing purchasing power to inflation than temporarily losing value of invested money due to short term stock market volatility.

To help reframe the concept of investing in the stock market, think of all the businesses that your household utilizes as part of life.

If you own some of these companies, every time you and others buy something from them, you’re entitled to a part of the profits that they earn.

Unless you stop buying from all of them entirely (and a catastrophic, society ending event would have to occur for that to happen, in which case cash would probably be useless as well), these companies are probably going to stay in business and keep churning out profits.

So there’s little risk of losing your money if you’re diversified enough and spread out your money across enough companies.

That’s where index funds come in, such as total market indexes or the S&P 500, which include the top 500 publicly traded companies in the US.

[Megan]

Where are you in the investing order of operations?
1. Are contributing to employer sponsored plans to atleast the match?

If so what is your asset allocation there?

2. If eligible are you contributing to an HSA and maxing it it out?

If so how are you treating those funds?

3. Are you maxing out IRAs?

If so what is your asset allocation there?

4. Are you maxing out employer sponsored retirement plans?

[Danny]

Money Market at brokerage or BOXX if you want LTCG vs Ordinary income. I would also assess if that much cash is needed to be liquid.

[Author]

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