‘I do not want to put it directly into stocks in case the market crashes’: I have $100,000 in savings for a house down payment in 10-11 months. What’s the safest way to earn on it?

Hi Money Minder,

So, I’ve got $100,000 saved up and I’m looking to buy a house in about 10-11 months. Any ideas on where I can stash this money safely and maybe even earn a little something on the side?

I’ve heard about these high yield savings accounts, but I’m wary. Are there any catches like not being able to withdraw for a while? If not, I might just go for it.

I’m not keen on investing in stocks right now because I want to avoid any market crashes. I’ll save that for later when I’m settled in my new home and not planning any big expenses anytime soon.

Thanks for your help, Money Minder!

Response from THE MONEY MINDER:

Hello There,

Congratulations on having such an impressive savings balance! It’s great that you’re planning ahead for a big purchase like buying a house. Given your timeline of 10-11 months before needing the money for a down payment, one practical approach would be to consider a high-yield savings account. While it’s true that some high-yield savings accounts may have restrictions like minimum balance requirements or limits on withdrawals, there are plenty of options available that offer competitive interest rates with no such constraints.

Putting your money into a high-yield savings account can provide a safe and secure way to earn some interest on your savings while keeping it easily accessible for when you’re ready to make your down payment. This option allows you to earn more than a traditional savings account without exposing your funds to the potential volatility of the stock market.

By choosing a reputable bank or financial institution with FDIC insurance, you can feel confident that your money is protected up to the maximum limit allowed by law. This way, you can have peace of mind knowing that your savings are secure and growing slowly but steadily. Remember to compare interest rates and fees across different high-yield savings accounts to find the best option that suits your needs.

Once you’ve purchased your house and have settled in, you can explore other investment opportunities in the stock market or elsewhere. For now, a high-yield savings account seems like a sensible choice given your circumstances. Wishing you all the best from THE MONEY MINDER as you continue on your financial journey!