Is Your Excess Cash Working for You?

• Americans have a substantial portion of their cash in non-interest-bearing accounts.

• Current interest rates offer savers the opportunity to keep up with inflation.

• There are several strategies for savers to earn interest on their cash.

---

You may be losing out on interest if your cash is held in a non-interest-bearing account. According to the Wall Street Journal, about $5.6 trillion, or 10% of Americans’ liquid net worth, is in low or no yielding bank deposits [1].

Keeping excess cash in a checking or traditional savings account may be costing you without you even knowing it.

Why Earn Interest on Cash?

Investing cash in high-quality short-term investments helps to keep up with inflation. With today’s inflation of 4.1% [2], having cash earn interest helps to reduce the erosion of purchasing power due to inflation.

Short term interest rates are set by the Federal Reserve and are currently targeted between 3.5-3.75%. This interest rate is roughly equal to the rate of inflation. The recent increase in inflation from the rise of oil prices has increased the likelihood of interest rate hikes in the back half of 2026.

What are My Options for Investing Cash?

There are several options for investing cash:

 

Money Market Funds

• Funds that invest in high-quality, short-term fixed income securities which make them safe, liquid and very accessible.

• Managed by a professional team and often comes with a small expense ratio.

U.S. Treasury Bills

• Short-term debt security issued by the United States government with maturities of up to 1 year.

• Backed by the full faith and credit of the United States government and are very liquid.

• Interest is exempt from state and local taxes.

 

High-Yield Savings Accounts

• Accounts that are offered by banks to increase deposits.

• An investor can compare the terms of a high yield savings account with different banks.

 

Certificates of Deposit 

• Specialized savings account that is offered by banks and credit unions that a fixed interest rate for a specified period.

• While there are liquidity constraints, they tend to offer higher yields than a standard savings account.

Conclusion

Having excess cash work for you can help your savings to maintain purchasing power. Fortunately, there are several strategies that can be utilized to make your cash work for you.

---

Footnotes

[1] Source: Spencer Jakab, “We’re Keeping Too Much Cash in Our Accounts These Days,” Wall Street Journal, May 28, 2026

[2] Annual Personal Consumption Expenditures price index increase for May 2026.

Disclosure

RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information. Please note, this article is for education purposes and should not be treated as tax or legal advice. This article is not a substitute for legal or tax advice from your professional legal or tax advisor.