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6 Best Short-Term Investments for 2026
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Where to Put Short-Term Savings: 6 Options to Consider
Worried about taking too much risk when the market is volatile? Online savings accounts, CDs and bond funds are some of the best short-term investments available.
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12 years of experience Expertise Brokerage accounts stock market cryptocurrencyChris Davis is a Managing Editor on the Investing team. He has passed the Series 65 (Uniform Investment Adviser Law Exam) and covered the stock market, investing strategies, investment accounts and cryptocurrency. His work has appeared in The Associated Press, The Washington Post, MSN, Yahoo Finance, MarketWatch, Newsday and TheStreet.
Chris Davis is a Managing Editor on the Investing team. He has passed the Series 65 (Uniform Investment Adviser Law Exam) and covered the stock market, investing strategies, investment accounts and cryptocurrency. His work has appeared in The Associated Press, The Washington Post, MSN, Yahoo Finance, MarketWatch, Newsday and TheStreet. Published in Managing Editor + more + more
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19 years of experience Expertise Retirement planning investment management investment accountsArielle O’Shea leads the investing and taxes team at NerdWallet. She has covered personal finance and investing for nearly 20 years, and was a senior writer and spokesperson at NerdWallet before becoming an editor. Previously, she was a researcher and reporter for leading personal finance journalist and author Jean Chatzky, a role that included developing financial education programs, interviewing subject matter experts and helping to produce television and radio segments. Arielle has appeared on the "Today" show, NBC News and ABC's "World News Tonight," and has been quoted in national publications including The New York Times, MarketWatch and Bloomberg News. She is based in Charlottesville, Virginia.
Arielle O’Shea leads the investing and taxes team at NerdWallet. She has covered personal finance and investing for nearly 20 years, and was a senior writer and spokesperson at NerdWallet before becoming an editor. Previously, she was a researcher and reporter for leading personal finance journalist and author Jean Chatzky, a role that included developing financial education programs, interviewing subject matter experts and helping to produce television and radio segments. Arielle has appeared on the "Today" show, NBC News and ABC's "World News Tonight," and has been quoted in national publications including The New York Times, MarketWatch and Bloomberg News. She is based in Charlottesville, Virginia. Published in Head of Content, Investing & Taxes + more + more
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Expertise Investing basicsAlieza Durana is a former investing writer at NerdWallet. She has over a decade of journalism experience covering housing, labor, gender and public policy issues for the Eviction Lab, The Fuller Project for International Reporting, New America and Slate. Her work has appeared in USA Today, The Washington Post, The Atlantic and Harvard Business Review. She is based in St. George, Utah.
Alieza Durana is a former investing writer at NerdWallet. She has over a decade of journalism experience covering housing, labor, gender and public policy issues for the Eviction Lab, The Fuller Project for International Reporting, New America and Slate. Her work has appeared in USA Today, The Washington Post, The Atlantic and Harvard Business Review. She is based in St. George, Utah. Lead Writer + more + moreIf you have a near-term goal you want to save for, like a vacation or moving costs, you'll want to earn the best possible return while taking as little risk as possible. However, a shorter timeline doesn’t mean you need to let your cash sit idle — there are several ways to help your money grow.
If you have a near-term goal you want to save for, like a vacation or moving costs, you'll want to earn the best possible return while taking as little risk as possible. However, a shorter timeline doesn’t mean you need to let your cash sit idle — there are several ways to help your money grow.What is a short-term investment?
What is a short-term investment?Money you'll need within five years falls into the short-term investing category. Ideally, the best short-term investments should provide a safe, easily accessible place to put cash while also earning some interest.
Money you'll need within five years falls into the short-term investing category. Ideally, the best short-term investments should provide a safe, easily accessible place to put cash while also earning some interest.When deciding which short-term investment might work best for your savings goal, you'll want to consider:
When deciding which short-term investment might work best for your savings goal, you'll want to consider:Do you want to earn interest on your money (lowest risk) or invest your money in a low-return fund (slightly higher risk)? Higher-risk investments, like individual stocks or even equity mutual funds, are generally discouraged for short-term investing.
Do you want to earn interest on your money (lowest risk) or invest your money in a low-return fund (slightly higher risk)? Higher-risk investments, like individual stocks or even equity mutual funds, are generally discouraged for short-term investing.How easy is it to get money out of the account? You typically have near-immediate access to your funds in a HYSA, for example, but in a CD, you'd have to wait until the term is up to access your money without facing penalties.
How easy is it to get money out of the account? You typically have near-immediate access to your funds in a HYSA, for example, but in a CD, you'd have to wait until the term is up to access your money without facing penalties.You may choose a different — perhaps higher-yield — investment if you're saving for something four years away rather than, say, three months away.
You may choose a different — perhaps higher-yield — investment if you're saving for something four years away rather than, say, three months away.6 short-term investment options
6 short-term investment optionsBest for growing an emergency fund → HYSA
Best for growing an emergency fund Best for growing an emergency fund → → HYSABest if you already invest → Cash management account or cash sweep
Best if you already invest Best if you already invest → → Cash management account or cash sweepBest if you have a set deadline → CD
Best if you have a set deadline Best if you have a set deadline → → CDBest for government-backed returns → Money market fund or bond fund
Best for government-backed returns Best for government-backed returns → → Money market fund or bond fund👉 The caveat? These accounts can work for a variety of goals, not just the ones listed. Whether you're saving for a down payment or next year's summer travel, this list may have an account that works for you. Keep reading to learn more about the rules and potential returns of each investment.
👉 The caveat? 👉 The caveat? These accounts can work for a variety of goals, not just the ones listed. Whether you're saving for a down payment or next year's summer travel, this list may have an account that works for you. Keep reading to learn more about the rules and potential returns of each investment.Best for growing an emergency fund: HYSA
Best for growing an emergency fund: HYSAHigh-yield savings accounts (HYSAs) allow you to deposit money into an interest-bearing bank account that typically offers higher-than-average annual percentage yields (APYs) compared with a typical savings account. The higher your balance is, the more interest you can collect on your funds over time. Bank savings accounts are also FDIC-insured, meaning that up to $250,000 of your money per institution, per depositor, is protected in case of a bank failure.
High-yield savings accounts (HYSAs) allow you to deposit money into an interest-bearing bank account that typically offers higher-than-average annual percentage yields (APYs) compared with a typical savings account. The higher your balance is, the more interest you can collect on your funds over time. Bank savings accounts are also FDIC-insured, meaning that up to $250,000 of your money per institution, per depositor, is protected in case of a bank failure.NerdWallet’s analysis shows that the annual percentage yields for high-yield online savings accounts are currently above 4%. This may not sound like much, but it’s higher than 0.38%, the current national average interest rate on savings accounts and what you’ll likely be offered at your hometown bank branch
NerdWallet’s analysis shows that the annual percentage yields for high-yield online savings accounts are currently above 4%. This may not sound like much, but it’s higher than 0.38% , the current national average interest rate on savings accounts and what you’ll likely be offered at your hometown bank branch Federal Deposit Insurance Corporation. National Rates and Rate Caps. Accessed Aug 5, 2025. .Potential interest rate: 4%+.
Potential interest rate: Potential interest rate: 4%+.Liquidity: High. You can withdraw your money at any time, but it may take up to a few days for the money to actually hit your external bank account.
Liquidity: Liquidity: High. You can withdraw your money at any time, but it may take up to a few days for the money to actually hit your external bank account.Where to open one: Any physical or online bank that offers a HYSA. The bank that works best for you depends on the type of interest rate you're looking for, as well as other factors such as convenience, deposit and withdrawal times, bonuses, and whether you want to open additional accounts within that bank's ecosystem.
Where to open one: Where to open one: Any physical or online bank that offers a HYSA. The bank that works best for you depends on the type of interest rate you're looking for, as well as other factors such as convenience, deposit and withdrawal times, bonuses, and whether you want to open additional accounts within that bank's ecosystem.» Next step: Our picks for the best high-yield savings accounts
» Next step: » Next step » Next step Next step Next step Next step : Our picks for the best high-yield savings accountsNerdy Perspective
I had long held the misconception that there must be a “catch” to earning interest through a high-yield savings account. I assumed they must charge fees, require a steep minimum deposit, and have strict rules around withdrawals. Because of this, it didn't seem like the right place to keep my emergency fund. Now, I wish I had done my research sooner. In reality, there are many high-yield savings accounts that don’t have these drawbacks. Don’t let your assumptions scare you away from earning interest on your savings — just be sure to read the fine print before you sign up.
I had long held the misconception that there must be a “catch” to earning interest through a high-yield savings account. I assumed they must charge fees, require a steep minimum deposit, and have strict rules around withdrawals. Because of this, it didn't seem like the right place to keep my emergency fund. Now, I wish I had done my research sooner. In reality, there are many high-yield savings accounts that don’t have these drawbacks. Don’t let your assumptions scare you away from earning interest on your savings — just be sure to read the fine print before you sign up.Best if you already invest: Cash management account or cash sweep
Best if you already invest: Cash management account or cash sweepAbout cash management accounts
About cash management accounts About cash management accountsAnother alternative for short-term savings is a cash management account. These accounts tend to offer services you'd expect from traditional savings and checking accounts — such as check writing, mobile check deposit, bill pay, money transfers, goal-setting and overdraft programs — but are offered by online brokerage firms and robo-advisors instead of banks. The benefit here is that as an investor, you can keep all your funds under one roof. You may also get higher interest rates on that parked cash than you might find by placing your money in a traditional savings account.
Another alternative for short-term savings is a cash management account. These accounts tend to offer services you'd expect from traditional savings and checking accounts — such as check writing, mobile check deposit, bill pay, money transfers, goal-setting and overdraft programs — but are offered by online brokerage firms and robo-advisors instead of banks. The benefit here is that as an investor, you can keep all your funds under one roof. You may also get higher interest rates on that parked cash than you might find by placing your money in a traditional savings account.To provide insurance, cash management accounts often sweep funds into partner banks, where the funds will then be covered by that bank's FDIC insurance. In some cases, the cash management account will partner with multiple banks, which can raise your overall FDIC insurance limit, since the limit is per institution.
To provide insurance, cash management accounts often sweep funds into partner banks, where the funds will then be covered by that bank's FDIC insurance. In some cases, the cash management account will partner with multiple banks, which can raise your overall FDIC insurance limit, since the limit is per institution.Potential interest rate: 3%+.
Potential interest rate: Potential interest rate: 3%+.Liquidity: Very high. Your money is immediately available. You can use this account similarly to how you'd use a checking account.
Liquidity: Liquidity: Very high. Your money is immediately available. You can use this account similarly to how you'd use a checking account.Where to open one: Any brokerage or robo-advisor that offers cash management. You'll want to consider interest rates, any additional fees you might incur and whether you'd like to use that provider for investing services in addition to cash management.
Where to open one: Where to open one: Any brokerage or robo-advisor that offers cash management. You'll want to consider interest rates, any additional fees you might incur and whether you'd like to use that provider for investing services in addition to cash management.» Next step: View our list of the best cash management accounts
» Next step: » Next step: » Next step: » Next step: Next step: Next step: Next step: View our list of the best cash management accounts Make sense of the markets with The Nerdy Investor Market news, economic forecasts and investing terms that actually matter to you (plus the latest in broker tech). Subscribe for freeAbout brokerage cash sweeps
About brokerage cash sweeps About brokerage cash sweepsSome — but not all — brokerage firms pay a high interest rate on uninvested cash. This could be money you've chosen not to invest, dividend payments that aren't reinvested, profits from the sale of an investment or other cash that has accumulated in your account.
Some — but not all — brokerage firms pay a high interest rate on uninvested cash. This could be money you've chosen not to invest, dividend payments that aren't reinvested, profits from the sale of an investment or other cash that has accumulated in your account.Some brokers may call this buying power — it is effectively the cash available to buy securities. But it doesn't have to be used that way, and if you opt for a brokerage firm that pays a high interest rate, you can earn a return on that idle money.
Some brokers may call this buying power — it is effectively the cash available to buy securities. But it doesn't have to be used that way, and if you opt for a brokerage firm that pays a high interest rate, you can earn a return on that idle money.One thing to keep in mind: In most cases, this uninvested cash will be covered by SIPC insurance, not FDIC insurance. SIPC protects up to $500,000 (up to $250,000 of that can be cash) per person, per brokerage account in the event the brokerage firm becomes insolvent.
One thing to keep in mind: In most cases, this uninvested cash will be covered by SIPC insurance, not FDIC insurance. SIPC protects up to $500,000 (up to $250,000 of that can be cash) per person, per brokerage account in the event the brokerage firm becomes insolvent.Potential interest rate: 3%+.
Potential interest rate: Potential interest rate: 3%+.Liquidity: High. Similar to a HYSA, if you want to transfer funds to an external bank account, the request may take up to a few days to process.
Liquidity: Liquidity: High. Similar to a HYSA, if you want to transfer funds to an external bank account, the request may take up to a few days to process.Where to open one: Since cash sweeps are merely one of the offerings that many brokerage accounts have, you'll want to make sure you open an account with a firm that meets your expectations when it comes to fees and usability as well.
Where to open one: Where to open one: Since cash sweeps are merely one of the offerings that many brokerage accounts have, you'll want to make sure you open an account with a firm that meets your expectations when it comes to fees and usability as well.» Next step: View our picks for brokers that pay high interest rates
» Next step: » Next step: Next step: Next step: Next step: View our picks for brokers that pay high interest ratesBest if you have a set deadline: CD
Best if you have a set deadline: CDCertificates of deposit — also known as CDs — can be a good risk-free savings option for money you are sure you don’t need for a set period of time. They work like this: You agree to put money into a bank account for a set period of time (ranging from three months to five or more years) in order to collect a preset, guaranteed interest rate on those funds. In general, the longer the term, the higher the interest rate.
Certificates of deposit — also known as CDs — can be a good risk-free savings option for money you are sure you don’t need for a set period of time. They work like this: You agree to put money into a bank account for a set period of time (ranging from three months to five or more years) in order to collect a preset, guaranteed interest rate on those funds. In general, the longer the term, the higher the interest rate.Remember that you may want to avoid locking your money up in a long-term CD when interest rates are rising. However, when rates are expected to fall, CDs can allow you to lock in a high rate. Note that CDs may have a minimum deposit requirement.
Remember that you may want to avoid locking your money up in a long-term CD when interest rates are rising. However, when rates are expected to fall, CDs can allow you to lock in a high rate. Note that CDs may have a minimum deposit requirement.Potential interest rate: 4%+, depending on CD term.
Potential interest rate: Potential interest rate: 4%+, depending on CD term.Liquidity: Low. If you need to withdraw your money before the CD term is up, you’ll typically pay a penalty of three to six months’ interest.
Liquidity: Liquidity: Low. If you need to withdraw your money before the CD term is up, you’ll typically pay a penalty of three to six months’ interest.Where to open one: Most banks and financial institutions offer CDs. When choosing a CD offer, it can be helpful to look at rates and terms to find a good fit for your particular goal.
Where to open one: Where to open one: Most banks and financial institutions offer CDs. When choosing a CD offer, it can be helpful to look at rates and terms to find a good fit for your particular goal.» Next step: View our list of the best CD rates
» Next step: » Next step: Next step: Next step: Next step: View our list of the best CD ratesBest for government-backed returns: Money market fund or bond fund
Best for government-backed returns: Money market fund or bond fundAbout money market funds
About money market funds About money market fundsNot to be confused with similarly named money market accounts, money market funds are mutual funds that purchase short-term, high-quality debt from the U.S. government, municipalities or corporations. Some money market funds hold municipal securities that are exempt from federal and state taxes.
Not to be confused with similarly named money market accounts, money market funds are mutual funds that purchase short-term, high-quality debt from the U.S. government, municipalities or corporations. Some money market funds hold municipal securities that are exempt from federal and state taxes.Money market funds are considered a relatively safe investment — they're more stable than both stocks and bonds. Like some other investment options on this list, money market funds are covered by SIPC insurance, not FDIC insurance.
Money market funds are considered a relatively safe investment — they're more stable than both stocks and bonds. Like some other investment options on this list, money market funds are covered by SIPC insurance, not FDIC insurance.Potential interest rate: 3%+.
Potential interest rate: Potential interest rate: 3%+.Liquidity: High. As with some other investments on this list, you may need to wait a few days for your transfer request to be completed.
Liquidity: Liquidity: High. As with some other investments on this list, you may need to wait a few days for your transfer request to be completed.Where to buy: You can purchase money market funds through an online brokerage account. While yield is one aspect to consider when choosing a fund, you'll also want to look into any expenses that could eat into your returns, like a fund's expense ratio and other fees.
Where to buy: Where to buy: You can purchase money market funds through an online brokerage account. While yield is one aspect to consider when choosing a fund, you'll also want to look into any expenses that could eat into your returns, like a fund's expense ratio and other fees.» Next step: See our picks for the best brokers for mutual funds
» Next step: » Next step: » Next step: Next step: Next step: Next step: See our picks for the best brokers for mutual fundsAbout bond funds
About bond funds About bond fundsA bond is a loan to a company or government that pays back a fixed rate of return. A bond is generally considered a safer investment than stocks, but it still carries some risks: the borrower could default, or bond values could decline when interest rates rise.
A bond is a loan to a company or government that pays back a fixed rate of return. A bond is generally considered a safer investment than stocks, but it still carries some risks: the borrower could default, or bond values could decline when interest rates rise.To reduce the risk of default, choose bond funds that primarily own government bonds or invest through a Treasury account, which typically invests in Treasury Bills, holds them to maturity and then reinvests the proceeds in more T-bills. Treasury accounts aren't as common as CDs or savings accounts, but they're becoming more readily available.
To reduce the risk of default, choose bond funds that primarily own government bonds or invest through a Treasury account, which typically invests in Treasury Bills, holds them to maturity and then reinvests the proceeds in more T-bills. Treasury accounts aren't as common as CDs or savings accounts, but they're becoming more readily available.Potential interest rate: 4%+.
Potential interest rate: Potential interest rate: 4%+.Liquidity: High. Once you've sold your shares and the cash has settled in your account, you can transfer your funds to an external bank account, which can take up to a few days.
Liquidity: Liquidity: High. Once you've sold your shares and the cash has settled in your account, you can transfer your funds to an external bank account, which can take up to a few days.Where to buy: You can purchase bond funds via an online brokerage account. Registered NerdWallet users can access a Treasury account through a collaboration with Atomic. Public, an online brokerage firm that NerdWallet reviews, also offers such an account. Wealthfront, a robo-advisor, offers an automated bond ladder that similarly invests in U.S. Treasurys.
Where to buy: Where to buy: You can purchase bond funds via an online brokerage account . Registered NerdWallet users can access a Treasury account through a collaboration with Atomic. Public , an online brokerage firm that NerdWallet reviews, also offers such an account. Wealthfront , a robo-advisor, offers an automated bond ladder that similarly invests in U.S. Treasurys.» Next step: View our picks for the best brokers for investing in bonds
» Next step: » Next step: » Next step: Next step: Next step: Next step: View our picks for the best brokers for investing in bondsBrokerage firms
Brokerage firms
Brokerage firmson Charles Schwab's website
on E*TRADE's website
on Vanguard's website
on Fidelity's website