Where to Keep Money Safe for the Short Term 

If you’re saving for a goal you plan to reach in the next few years, you might be asking where to keep that money. You want it to be there when you need it, but you’d also like it to grow in the meantime. 

You may be saving for a vacation home, a wedding, a major purchase or another milestone that could happen within the next few years. The question becomes, where do I keep this money in the meantime? 

For many, the answer isn’t clear right away. You want your money to be easy to access, but you also hope it can earn more than a regular savings account offers. At the same time, you may not want to risk losing money to market ups and downs. 

To find the right balance between growth, safety and access, start by thinking about your goals and the choices you have. 

Start with the goal 

Before you choose where to keep your money, pause and think about what you want it to do. 

Ask yourself: 

• What am I saving for? 
• When will I need the money? 
• How important is principal protection? 
• Am I comfortable with any market risk? 
• Will I need access to some of the money before I reach my goal? 
• Are taxes an important consideration? 

Your answers can help you narrow down your choices and find strategies that fit your needs. 

For example, you might position money you need within a few years differently than money you’re saving for a goal ten years away. Likewise, someone who values guarantees may choose a different approach than someone willing to accept more risk in pursuit of higher growth potential. 

It’s also important to remember that goals can change over time. A vacation home purchase may be delayed, a wedding may arrive sooner than expected or a family need may take priority over other plans. 

Because life doesn’t always follow a set timeline, consider not only how your money can grow but also what options you’ll have if circumstances change. Choosing an approach that fits your current goal while providing flexibility for the future can help you stay prepared for whatever comes next. 

Not every dollar has the same purpose 

When people think about investing, they often focus on long-term goals such as retirement. Those goals may involve a time horizon measured in decades, allowing more time to recover from market ups and downs. 

But not all money is intended for long-term growth. 

You might already have money set aside for a goal that’s just a few years away. Since you’ll need it sooner, your priorities could be different from those for your retirement or long-term investments. 

When evaluating money intended for a short-term goal, you may be looking for: 

• Protection from market volatility. 
• Predictable growth. 
• A defined time frame. 
• Access to funds if circumstances change. 
• Confidence that your money will be available when you need it. 

In these cases, keeping your original amount safe can be just as important as making a profit. 

Common places people keep short-term savings 

When saving for a near-term goal, many people naturally turn to familiar choices such as: 

• Savings accounts. 
• Certificates of deposit (CDs). 
• Money market accounts. 

These choices offer stability and might be a good fit depending on your needs. Many people start with these accounts because they’re familiar and help avoid market risk. 

But it’s a common mistake to think these are your only choices. 

There are several ways to save for short-term goals. While savings accounts, CDs and money market accounts are often the most familiar, other guaranteed options may also be worth considering depending on your timeline, growth objectives and need for principal protection. 

That’s why it helps to think about your goals first, instead of starting with a specific product. 

Looking beyond the interest rate 

When you compare short-term savings options, the interest rate is usually the first thing you notice. That makes sense, since the rate helps your money grow toward your goal. 

But the rate isn’t the only thing to consider. 

The best option often depends on what you’re trying to accomplish. As you compare choices, think about factors such as: 

• Whether your principal is protected. 
• How long the rate is guaranteed. 
• How earnings are taxed. 
• Whether you’ll have access to funds if plans change. 
• What options may be available when the guarantee period ends. 
• How the option’s growth potential aligns with your goals and timeline. 

Different financial options offer different combinations of these benefits. Some may offer competitive guaranteed rates while also providing tax-deferred growth, protection from market losses and flexibility if circumstances change. 

When deciding where to keep money you’ll need soon, look at the whole picture, not just one feature. Knowing what matters most to you can help you compare your choices and determine whether your current approach aligns with your goals, timeline and the need to access your money. 

Plans have a way of changing 

A goal that seems certain today may look different three years from now. 

Perhaps you’re saving for a vacation home, but a family member needs financial assistance. Maybe a wedding arrives sooner than expected. You may decide to postpone a major purchase, or a new opportunity may emerge. 

Since life can change, it’s important to know not just how your money can grow, but also what choices you have if your plans shift. 

A good short-term savings plan should fit your current goal but also be flexible in case your priorities change later. 

A MYGA may be worth exploring 

One option some people consider for money they’ll need in the next few years is a multi-year guaranteed annuity (MYGA). 

A MYGA is designed to provide: 

• A guaranteed interest rate for a specified period, such as three, five or seven years. 
• Protection from market losses while the money is set aside. 
• Tax-deferred growth may help money accumulate more efficiently. 
• Access features that may provide flexibility if plans change. 

If you want both growth and protection for your money, a MYGA can offer features that are different from regular savings options. 

As with any financial product, make sure you understand how it works, including withdrawal rules, guarantees and how it fits into your overall plan. 

Finding the right fit for your goals 

If you’re saving for something just a few years away, you might have more choices than you think. 

While many people start with savings accounts, CDs or money market accounts, other financial products may provide features such as guaranteed growth, tax-deferred accumulation, principal protection and flexibility when circumstances change. 

The best choice isn’t always the one with the highest rate or the most well-known name. It’s usually the one that matches your timeline, priorities and how you plan to use the money. 

If you have assets set aside for an upcoming milestone, consider talking with your financial professional about the options available. A conversation about timing, access, growth potential and protection can help determine whether your current strategy still fits your goals. 

Sometimes, the real opportunity isn’t saving more but making the most of the money you’ve already set aside for your future plans. 

Disclosures 

In approved states, Ameritas RateLock Multi-Year Guaranteed Annuity (form 2708) is issued by Ameritas Life Insurance Corp. Policies and riders may vary and may not be available in all states. Optional riders may have limitations, restrictions and additional charges.  

Guarantees are based on the claims-paying ability of the issuing company.  

Withdrawals of policy earnings are taxable and, if taken prior to age 59½, a 10% penalty tax may also apply.  

The information presented here is not intended as tax or other legal advice. For application of this information to your specific situation, you should consult an attorney.  

Annuities are not a deposit, not FDIC insured, may go down in value, not insured by any federal government agency and is not guaranteed by any bank of savings associations.