Commentary

There’s No Perfect Place to Park Short-Term Cash Right Now

A pros-and-cons look at where investors stash cash they don't need today

By Edward Rosenberg, Head of ETFs, Strategy Shares October 22, 2026 7 min read

With short-term rates still elevated, more savers than ever are hunting for the “best” place to stash cash they don’t need today but might need in three, six, or twelve months. The good news is that there are more decent options paying real yield than a few years ago. The bad news is that every one of them comes with a catch. Each is a trade-off between yield, safety, liquidity, taxes, and convenience. Here’s an honest look at the main contenders and where each falls short.

Evaluating Where to Stash Cash

Instrument	Representative Yield	Quick Take	Source
Savings accounts	0.42%	National average across savings and bank money market accounts. Best in class options run several times higher.	FDIC National Rates and Rate Caps; Bankrate
Money market mutual funds	3.38%	Average across nine major fund families’ government and Treasury funds.	Vanguard, Fidelity, Schwab, BlackRock, T. Rowe Price, Franklin Templeton, Capital Group, Goldman Sachs, and Federated Hermes fund pages; YCharts
3 month Treasury bill	3.69%	Direct market rate, not a fund.	YCharts, 3 Month Treasury Bill Rate
3 month T bill ETFs	3.60%	Average of SGOV and BIL, the two largest government Treasury ETFs.	iShares; State Street SPDR
3 month CDs	1.14%	National average. Best nationally available rate runs close to 4%.	The Motley Fool, sourced from FDIC data; Bankrate
Brokerage sweep, default	1.48%	What you earn if you never change your account’s default cash setting.	Merrill official rate sheet; Schwab; OptimizedPortfolio.com; Vanguard (YCharts)
Brokerage sweep, opt in	3.49%	What you earn if you actively choose the money fund option instead.	Fidelity; Schwab Asset Management; Vanguard (YCharts)
Ultra short bond ETFs	4.13%	Average of ICSH, JPST, and MINT. Carries modest credit risk.	iShares; J.P. Morgan Asset Management; StockAnalysis.com

Yields shown are representative figures based on national averages, selected fund and ETF yields, and prevailing market rates as of late August and early September 2026. Yield calculations and methodologies vary by investment type and may not be directly comparable. See the companion data workbook for detailed sources.

Savings Accounts

A savings account is the simplest option. It’s FDIC insured up to applicable limits (often up to $250,000 per depositor), readily accessible, and protects principal within those insurance limits. Many banks also offer a money market account, which is still a bank deposit product but usually bundles check-writing or debit-card access and sometimes uses tiered rates based on balance. Both are FDIC insured deposit accounts with very similar trade-offs.

Savings Accounts at a Glance

Pros	Cons
FDIC insurance means your money is protected, even if the bank fails Fully liquid, with withdrawals available anytime and no penalty Simple to understand, with little fine print to parse Money market accounts often add check-writing or debit-card access that a plain savings account doesn’t offer	The national average for both is a rounding error, well under half a percent, because most big traditional banks have little incentive to compete on savings rates Even the best online high-yield savings accounts, which pay several times the national average, carry rates that move at the bank’s discretion with no notice Money market accounts sometimes require a minimum balance or use tiered rates, so you may need a large balance to earn the advertised top rate Banks could have minimum balances that charge fees when they aren’t met.

Pros

Cons

FDIC insurance means your money is protected, even if the bank fails
Fully liquid, with withdrawals available anytime and no penalty
Simple to understand, with little fine print to parse
Money market accounts often add check-writing or debit-card access that a plain savings account doesn’t offer

The national average for both is a rounding error, well under half a percent, because most big traditional banks have little incentive to compete on savings rates
Even the best online high-yield savings accounts, which pay several times the national average, carry rates that move at the bank’s discretion with no notice
Money market accounts sometimes require a minimum balance or use tiered rates, so you may need a large balance to earn the advertised top rate
Banks could have minimum balances that charge fees when they aren’t met.

Money Market Mutual Funds

These are funds, not bank deposits, that invest in very short-term instruments like Treasury bills, repurchase agreements, and, for “prime” funds, high-grade commercial paper. Every major brokerage and fund family offers a flagship version, and they consistently pay noticeably more than a savings or bank money market account.

Money Market Mutual Funds at a Glance

Pros	Cons
Yields tend to track short-term market rates closely and adjust quickly when rates change Highly liquid, usually with same-day or next-day settlement Available from every major fund family, so there’s plenty of choice	Not FDIC insured. These are investments, not deposits, and a money fund can theoretically “break the buck,” though that’s exceedingly rare for a government or Treasury fund Yields vary by provider and share class, so the fund holding your money isn’t automatically the best paying one Not always the automatic default in your account. Some brokerages quietly default new accounts into a lower yielding cash product, so you may have to actively select the money fund yourself

Pros

Cons

Yields tend to track short-term market rates closely and adjust quickly when rates change
Highly liquid, usually with same-day or next-day settlement
Available from every major fund family, so there’s plenty of choice

Not FDIC insured. These are investments, not deposits, and a money fund can theoretically “break the buck,” though that’s exceedingly rare for a government or Treasury fund
Yields vary by provider and share class, so the fund holding your money isn’t automatically the best paying one
Not always the automatic default in your account. Some brokerages quietly default new accounts into a lower yielding cash product, so you may have to actively select the money fund yourself

3-Month CDs

A certificate of deposit locks your money up for a fixed term in exchange for a fixed rate.

3-Month CDs at a Glance

Pros	Cons
FDIC insured, same as a savings account The rate is locked in for the term, so you’re protected if rates fall during that window	The national average CD rate is surprisingly low, often below even the average savings rate, so shopping around matters enormously Early withdrawal usually means forfeiting some interest as a penalty Being locked in also means being locked out. If rates rise after you buy, you’re stuck at the lower rate until maturity

Brokerage Sweep Accounts

This is the cash that just sits in your brokerage account between trades, and it may be the single most misunderstood item on this list. Depending on the firm, your “sweep” cash either lands in a genuine money market fund or in a low-yield bank deposit program, and the difference between the two is enormous.

Brokerage Sweep Accounts at a Glance

Pros	Cons
Zero effort, since your uninvested cash is automatically put to work without you doing anything No separate account to open or manage, since it’s already inside your brokerage At firms that default into a money market fund, the yield can be very competitive	At firms that default into a bank sweep program instead, the rate can be a tiny fraction of what’s available elsewhere, sometimes near zero The default isn’t always disclosed clearly, and some firms have changed it in ways that quietly lower what customers earn Switching to a better paying option often requires actively opting in, a step many investors never take

Treasury Bills and T-bill ETFs

Buying 3-month Treasury bills directly, or through an ETF that invests in short-term Treasuries, provides exposure to securities backed by the full faith and credit of the U.S. government.

Treasury Bills and T-Bill ETFs at a Glance

Pros	Cons
Backed by the full faith and credit of the U.S. government Interest from directly held Treasury bills is generally exempt from state and local income taxes. Treasury ETF distributions may also qualify for favorable state tax treatment, depending on the fund’s holdings and applicable tax rules. T-bill ETFs trade like a stock. You can buy or sell any time the market is open, with no lock-up	Yields move with the market and aren’t guaranteed for any period An ETF carries a small management fee that direct T-bill ownership doesn’t ETF share prices can dip slightly if you need to sell during a period of market stress, unlike a bank deposit’s fixed principal

Ultra-Short Bond ETFs

A step beyond pure T-bill funds, these actively managed ETFs hold a mix of Treasuries plus investment-grade corporate notes, asset-backed securities, and commercial paper, taking on a bit more risk in exchange for a bit more yield.

Ultra-Short Bond ETFs at a Glance

Pros	Cons
Typically yield noticeably more than pure T-bill ETFs or government money funds, thanks to modest credit and duration exposure Actively managed, so a professional is making the credit and duration calls rather than a fixed formula Still highly liquid and tradable like a stock	Not government guaranteed. These funds carry real credit risk, however small, and can lose value The extra yield is compensation for extra risk, which is easy to forget when rates have been calm for a while Fees run higher than a passive T-bill ETF, and results depend on the manager’s skill

Finding the Right Fit for Your Short-Term Cash

If you line all these options up, a pattern emerges. Safety, yield, liquidity, tax efficiency, and convenience rarely show up together:

FDIC-insured products are often the safest, but usually the stingiest unless you shop hard for the rate.
Money funds and T-bill ETFs often pay more but trade deposit insurance for a small, well understood set of investment risks.
CDs offer a locked in rate at the cost of locked up money.
Ultra-short bond ETFs push yield a bit further by accepting a bit more credit risk.
Brokerage sweep accounts require the least effort, but that same convenience can also make them the option costing you the most, if you never check what’s actually happening with your cash.

There’s no single “best” instrument. The trade-off just has to match the job the cash is doing. Money you need next week belongs somewhere boring and liquid. Money you won’t touch for three months can afford to reach a little further for yield.

Either way, the one universal piece of advice is the simplest: Know what your money is actually earning right now, because in a market like this, “good enough” and “best available” are often surprisingly far apart.

Given the current environment, explore our funds to learn how Strategy Shares could help fill the gap left by traditional options.

Rates cited are approximate national averages and representative fund and ETF yields as of late August and early September 2026, and will have moved by the time you read this. Always check current rates before making a decision.

← Back to all research