Save like the wealthy do
If your savings has been fully invested since fully invested since the 2008 Global Financial Crisis, you’re sitting pretty — an investor with only 10% or 20% of their portfolio sitting in cash, which continues to lose its value, would have built more wealth than a non-investor.
When hard times come, there’s value in not selling assets at a loss, and having the ability to load up on highly-depressed assets.
Recent data suggests High Net Worth Individuals (HNWIs), or those with more than $1 million in liquid assets, keep an average of just 15% of their wealth in cash and cash-like instruments. These can include treasury bonds, certificates of deposit (CDs) or money market funds. With these secure investments, HNWIs can ride the waves of the market. After all, market crashes are a certainty, but timing these events is near-impossible.
Discover offers certificates of deposit with terms ranging from 3 months to 10 years. The rates are locked in and that’s particularly helpful in today’s economic climate, as the Federal Reserve is gearing to lower the benchmark rates in the upcoming months.
Right now, you can get 4.10% APY on a 12-month term, and then you can just sit back and watch your savings grow over the next year.
CDs can be great for investors who want to park their cash for periods of time, but there are often restrictions or penalties associated with withdrawing your money before the end of the term.
Many Americans might overlook their daily accounts, only to find that their savings aren’t where they want them to be. Instead of losing out, you can earn up to 4.60% APY on savings balances – which is up to 10x the national average — and 0.50% APY on checking balances.
To see your options, you can check out the Moneywise Best High-Yield Savings Accounts of 2024 to find some savvy savings options that earn you more than the national average of 0.4% APY.
