Where’s the Best Place to Park Your Cash?

Most investors probably don’t spend too much time thinking about their cash holdings. They most likely view their cash as a necessary evil: It earns next to nothing right now, but the trade-off is principal stability (or, for non-guaranteed investments, something pretty close to it) and liquidity.

But for investors with meaningful cash holdings, as is the case for many retirees, even small variations in cash yields can add up to a nice chunk of change. Due to changes in the interest-rate environment, what was the best-yielding cash vehicle a decade ago may not be today.

Moreover, cash and cashlike instruments are not on an equal footing when it comes to guarantees. While nearly all of the major cash and cashlike instruments have done a good job of protecting investors’ capital over time, investors seeking an ironclad guarantee of principal preservation will want to focus on FDIC-insured investments.

Yahoo Finance

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