Where to (Temporarily) Put Your Savings Right Now


If you’re following the news headlines lately, this may be one of those times when you’re a bit antsy about your financial investments.

While it’s certainly understandable that you might be tempted to make some money moves, the key is to make the right ones for your financial future.

Money expert Clark Howard recently shared some reasons why uncertain times are no excuse to abandon a sound investment strategy.

3 Steps to Protect Your Savings Right Now

“Stock markets have been very, very highly valued in the United States” Clark said on a recent podcast, “and they could see quite a breather over the next period of time.”

But that doesn’t mean your savings have to suffer. Here are three steps Clark recommends you take now:

1. Keep Putting Your Money Into Your 401(k)

Clark says now is not the time to pause on funding your retirement accounts. In fact, he recommends that you continue to put your money into your 401(k) plan every pay period.

“Keep putting it into things like the target retirement fund, which is the smartest thing to do, because you’re doing a method of investment known as dollar-cost averaging.”

With dollar-cost averaging, an investor puts money in the market regardless of highs and lows by buying stocks or funds over a period of time without concern for market volatility.

2. Move Savings Account Money to CDs

One of the best ways to grow your savings is to get some return on the money you set aside. When it comes to savings accounts, Clark says “those rates are likely headed much lower.”

For the most competitive yields, Clark recommends online banks (and possibly credit unions, but never a traditional bank) because they’re offering CDs that pay around 2% right now.


Here’s what he advises:

“If there’s money you don’t need in the next while, it will be very much to your advantage for you to lock your money in a one-year CD as an alternative to being in an online savings account.”

Furthermore, many financial institutions are paying less on a three-year or a five-year CD than they are on a one-year CD, he says.

“That is a market indicator that a recession is baked into those rates,” he adds. “So the best thing now is a one-year CD.”

3. Be Patient and Play the Long Game

Clark says the savvy investor can benefit from the silver linings inherent in turbulent economic times by basically playing the long game.

If you can stay the course and not panic, your investments will be fine.

For those types of people, he says, “a stock market decline in 2020 makes no difference to you down the road, but could actually make you more money as the market declines in the short term.”

Final Thought

To sum it all up, don’t get rattled by huge ups or downs in the market. The key is to take cues from the market and adjust your investment strategy accordingly.

Clark says that if you continue to buy more shares over the long term — even as values decline — it can pay off.

“As those shares ultimately recover, you’ll end up with more money down the road.”

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