![]() But he says these mutual funds aren't FDIC insured. One example is Schwab Municipal Money Fund (SWTXX), which earned 1.18 percent on its 52-week average return. Dave Dietz, president of Midas Financial, says for people who need their cash in a few months, these are the best way to go. Available to anyone with a brokerage account, these funds offer slightly greater yields compared with traditional bank savings accounts, and the tax-exempt ones shield investors from the tax bite. Tax-exempt municipal money market mutual fundsįor investors who are willing to wait a few days to access their cash, high-yield money market mutual funds are another option. ![]() "If you tell me by five o'clock you need your cash, you'll get it." For investors who want to access to their cash right away, seek funds that are "daily liquid," she says. Deborah Cunningham, chief investment officer of global money markets at Federated Investors, says these funds are a little riskier than government securities, but still contain extremely safe corporate bonds. Nonrated prime funds hold similar types of securities, but without the third-party oversight. ![]() The AAA-rated funds invest in corporate bonds with the highest credit quality rating by agencies like Standard & Poor's or Moody's. There are several types of money market funds, and the highest yielding are prime money market accounts. It has an expense ratio of 0.12 percent and a yield of 2.41 percent. An alternative is iShares GNMA Bond ETF ( GNMA). Investors can buy these securities from their financial advisors or brokerage accounts, but the minimum is $25,000. "Mortgages can be attractive in a rising interest rate environment, given the monthly cash flows," he says. government mortgage loans, and its government backing makes these securities a safer option while picking up additional yield, he adds. Ginnie Mae is the main financing arm for U.S. McClain likes using Ginnie Mae mortgage-backed securities when looking for an investment vehicle that maximizes return and provides needed principal protection. It has an expense ratio of 0.24 percent with a 1.44 percent yield. A fund version is the VanEck Vectors Pre-Refunded Muni ETF ( PRB). Financial advisors can buy these bonds directly. Any proceeds are usually invested in Treasury bills until the original bond's scheduled call date occurs. Treasury and "can be an attractive place to earn additional yield while maintaining a high level of credit protection." These bonds are issued to fund other callable bonds, which are bonds that can be redeemed by the issuer before its maturity. Michael McClain, a chartered financial analyst and portfolio manager at Hedeker Wealth, says these municipal bonds are backed by the U.S. "That yield is pretty impressive given that it doesn't take on much interest rate risk or much credit risk," he says. It has an expense ratio of 0.15 percent and a yield of 1.72 percent. This fund has a weighted average maturity of 1.9 years and holds 69 securities with maturities between one and three years. Treasurys, Rosenbluth suggests iShares 1-3 Year Treasury Bond ETF ( SHY). It has an expense ratio of 0.15 percent and a 1.66 percent yield.įor investors willing to ride out the interest rate curve for a higher yield while remaining in safe U.S. An alternative is iShares Short Treasury Bond Fund ETF (ticker: SHV). The current rate for a one-month Treasury bill is 2.42 percent. "If you have the scale and the ability, it's your best option," Bailey says. Treasury bills can be purchased from a financial advisor, bank broker or directly from the government at. These maturities can range in duration from a few days to 52 weeks, with no fees and small commissions. Treasury bills for investors who want to tie up cash for just a month or two. Mike Bailey, director of research at FBB Capital Partners, recommends U.S. ![]() Here are a few short-term options with high returns. Experts say these investments don't decline much while interest rates rise, and investors benefit from the higher yield. Todd Rosenbluth, senior director of exchange-traded funds and mutual fund research at CFRA, says investors have started to purchase ETFs and mutual funds with shorter durations and minimal interest rate sensitivity. With the Federal Reserve raising interest rates, rates on securities that mature anywhere from several days to a few years are boasting some of the highest yields in years. Short-term investments may be a good solution for those looking to remain liquid or stashing cash in an emergency fund.
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