In a world where financial stability is paramount, many individuals are seeking ways to make their savings work harder without compromising on safety and liquidity. That’s why we want to tackle today from someone trying to generate greater yield: how can I earn more interest on $120,000 sitting in a bank account while maintaining safety and liquidity?

Jake Doser, CFP®, CPWA® and Nicholas J. Colantuono, CFP® join the Money Wisdom podcast to discuss various options, such as money market funds, short-term CDs, and fixed annuities, and emphasize the importance of aligning financial decisions with personal goals and overarching plans.

The first step to answering the question is to define the purpose of this money. What personal goals do you have? What big purchases are on the horizon? It’s so important to align any decision you’re going to make with these goals to ensure that your money serves its intended purpose.

Once you’ve established that, then we can begin looking at the other options you might have for your money. Jake and Nick discuss options like money market funds, which act as cash alternatives in brokerage accounts, offering liquidity while potentially providing higher returns. They also explore short-term CDs as a viable option for those looking for safe, liquid investments. While these require a time commitment, the penalties for early access typically involve losing interest rather than principal, maintaining liquidity.

For those with a slightly longer time horizon, fixed annuities present another option. These insurance products offer a guaranteed rate of return for a fixed period, although access to the principal is limited. But again, you want to align your money with your goals because these are more suitable for a medium to long-term investment strategy.

That’s why financial planning is critical. They note that many individuals have sufficient funds for their dream retirement but lack the clarity and confidence that a well-structured plan provides. By aligning your money with your goals, you can achieve a balance between safety, growth, and tax efficiency, ultimately leading to financial peace of mind.

To aid you in this financial journey, get a copy of the Money Map book, a resource that outlines the foundational steps to building a solid financial plan. This book is available by texting the word “map” to 800-757-0436.

Whether you’re approaching retirement or simply seeking to optimize your savings, this episode offers a wealth of knowledge and practical advice. Tune in to gain a deeper understanding of how to make your money work harder while maintaining the security and liquidity you need.

Here’s what we discuss in this episode:

0:00 – Intro

1:20 – Today’s question

2:30 – The why

3:22 – Goals for this money

4:55 – What options do you have?

7:06 – Tax considerations