Date: March 23, 2022

How Do I Generate More Yield On My Cash?

During times of inflation and market volatility, choosing the best investment is challenging to say the least. With conflicting information in the media and as economic circumstances change, you have to be prepared to adapt. As a financial advisor in Gilbert, we have clients asking where to invest their cash. 


Market Volatility, Inflation, Oh My! Read Our More In-depth Response to Challenges for 2022.


Liquidity can provide peace of mind and a feeling of stability. However, holding significant amounts of cash beyond your emergency fund during an inflationary period can be detrimental. As inflation rises, the buying power of each dollar decreases.

Fortunately, there are several ways to earn money on your cash while you get your bearings in the market. A relatively liquid position combined with a disciplined investing strategy can convert market volatility into long-term wealth. When you position yourself to take advantage of opportunities and weather difficult circumstances, you can make the most of tricky times.

Are you ready to generate more yield on your cash in the short and long term? Although this is not investment advice, here are some surface-level ideas to consider.

High-Yield Savings Accounts

A high-yield savings account will not deliver the most significant return on your money. In early 2022, the most competitive APYs range from .5% to .65%. However, many local banks are still closer to .1%.

The advantages are that many high-yield savings accounts are federally insured (check first or have your investment advisor verify), and your funds are entirely liquid. As interest rates rise, so will your return.

Short-Term Certificates of Deposit

Certificates of Deposits (CDs) can work well for short-term financial goals. You lock in your deposit for a minimum of three months. The longer you’re willing to leave your money in the CD, the higher your interest rate will be.

In February of 2022, the 3-month interest rates are similar to the best returns on a high-yield savings account, maxing around .6%. Six-month bond rates can go up to .8%, though that is rare at this time. Longer-term CDs will pay more, but you have to balance the term with the potential for interest rate increases in the near future. Once purchased, the rate paid on a CD does not increase.

Short-Term Government Bond Funds 

A short-term government bond fund can either be a mutual fund or ETF. They invest in government bonds with shorter maturity dates, generally less than five years.

You can purchase shares in the fund, which allows you to earn interest from various government bonds without the term commitments required when you buy a bond directly. Short-term government bond funds tend to pay better interest rates than money market funds.

Short-Term Corporate Bond Funds 

Although not as rock solidly secure as government bonds, corporate bonds tend to pay more than government bonds. Short-term corporate bond funds can be mutual funds or ETFs, and they diffuse the risk of corporate bonds by investing in a variety of them.

A fund diversifies the types of corporate bonds they hold, so you get some exposure to higher returns through the fund, but the security of more stable options balances it. With corporate bonds, the higher risk opportunities pay much higher returns. If you are working with an investment management firm in Arizona, your investment advisor can walk you through the options.

U.S. Treasuries

There are three different types of U.S. Treasuries, or savings bonds, and their most notable difference is the time it takes them to mature. The longer the term, the higher yield they will deliver. Savings bonds are designed for the average investor seeking stable, safe investments for moderate returns.

Treasury bills are a short-term investment, from four to 52 weeks. They may have a fixed or variable rate of return. You can reinvest the funds on the maturity date or withdraw your principal plus interest.

Treasury notes are a medium-length investment, with terms from two to ten years. They earn a fixed interest rate that is adjusted every six months.

Treasury bonds are long-term investments with a 30-year maturity. If you hold it for a minimum of one year, but less than five years, you can cash it in at the cost of three months of interest. After five years, you can liquidate a Treasury bond with no penalty.

In the first quarter of 2022, Series EE Treasury bonds offer a return of .10%. However, if you hold it for at least 20 of the 30-year term, they are guaranteed to double in value. Even if the interest payments do not result in that level of return, the Treasury will make up the difference.

Series I bonds are designed to adjust with inflation, and the rate of return changes every six months. Unlike the Series EE bonds, the Series I bonds have no guaranteed return even if you hold them for 20 or 30 years. However, in early 2022 the Series I bonds are at 7.12%, a much higher rate than most bond and savings plan options.


Since gold prices can be volatile in the short term, it’s a better long-term investment than a quick place to stash some cash. However, gold prices tend to rise when the market is bearish, so it’s often considered a good hedge. 

There are several ways to invest in gold. You can buy gold bars, invest in gold funds, or buy shares in a mining company. Each of these options comes with pros and cons, and it’s wise to speak with your investment advisor before committing your funds.

Real Estate Investment Trusts

Real estate can be an inflation hedge since people always need housing, and both home prices and rents can rise when inflation increases. Real estate investment trusts (REITs) are companies that own or finance income-producing real estate across various property sectors.

Buying shares in a REIT is not the same as owning property. You own a stock in a company involved in real estate. Also, not all real estate sectors perform well in all market conditions, so while a REIT can be a solid hedge for your portfolio, it’s best to discuss your options with your investment advisor.  As an investor you can choose between publicly traded REITS and Private REITS.  Each has pros and cons.  We recommend all investors have some real estate exposure and we are happy to help you determine which type is best for you.

Slow and Steady Wins the Race

Market volatility can be mentally and emotionally challenging. While you may struggle between liquidating everything or just leaving all your investments where they are, a calm and steady approach to change will deliver the best results.

Inflation Doesn’t Have To Be Bad News For Affluent Investors Like You

As a financial advisor in Gilbert, AZ, we can help you determine what percentage of your net worth should be invested in savings, bonds, or other inflation hedges. Connect with us if you are ready to work with a financial advisor to understand your options and set strategies to reach your goals.

Already a client? Check out your Personal Data Room in the top right corner of our home page.

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David Watts

Dave is one of the firm’s founders. He helps business owners, professional athletes, and other high-net worth clients develop and implement financial plans and strategies. He also specializes in helping those with single-stock positions to diversify and manage their financial lives. Other areas of specialty are wealth transfer plans for concentrated stockholders and business owners; tax minimization strategies for those with employee stock options; cash flow management; and risk management planning.