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Thursday, December 07, 2023

How to keep your cash safe right now

How to keep your cash safe right now 

Empower Personal Cash

Key takeaways 

  • Recent banking concerns are causing consumers to question their cash holdings, but maintaining a diversified portfolio includes your approach to cash. 
  • Why? Cash amounts to nearly 28% (or $66,000) of the average Empower Personal Dashboard™ user’s portfolio.* 
  • Here’s why you may want to consider a high-yield cash account that offers no minimums or fees, flexible transfers options, and higher returns on your cash savings. 


This month’s bank collapses have left many consumers confused. More people than ever are considering pulling their money out of banks,1 uncertain if their hard-earned dollars are safe. 
However, cash can play an important role in a diversified portfolio. It provides easy access for your emergency fund and short-term financial goals, like buying a new car or making a home down payment within the next couple of years. 
If you have a long-term investment strategy, then you understand the importance of making your money work for you and, along the way, ensuring it's safeguarded with ample FDIC coverage. 

How much cash should you keep in the bank? 

Cash amounts to almost 28%* of the average portfolio of Empower Personal Dashboard™ users. In dollars, that’s nearly $66,000 per person* – no small chunk of change. 

Age by decade 

Median cash 

Percent of overall portfolio 

























No age data 



Grand Total 



Anonymized user data from the Empower Personal Dashboard™ as of 03/23. 

Like many people, you may default to leaving extra funds in your traditional checking or savings account. Reasons vary. Maybe you haven’t decided how to allocate it to investment accounts. Perhaps you’re stowing away extra money for a rainy day. Or you could be building up savings for a short-term goal like funding a vacation or new car. All of these – particularly the latter two – are valid reasons to keep cash working for you. 

5 account types for your short-term savings

Here are some options for your earnings that you want to keep accessible. 

1. High-yield cash accounts

Typically, these accounts are associated with online institutions. With these accounts, your money can earn more money while it’s parked there. High-yield accounts provide several advantages beyond higher yields on your money.                                          

The advantages of high-yield accounts include: 

  1. FDIC insurance, just like your traditional bank 
  1. High liquidity (some have withdrawal restrictions, but they aren’t generally overly restrictive) 
  1. Convenience features, i.e. your money is readily available on a user-friendly platform 
  1. No fees or minimums – you keep the money you earn 

Tip: Learn how you could get 4.25% APY and FDIC insurance with Empower Personal Cash™.**     

2. Money market accounts

This option is very similar to a high-yield account, including FDIC insurance. At many financial institutions, the differences between a money market account and a savings account are negligible. However, money market accounts are more likely to restrict the number of withdrawals per month, so you may want to explore those restrictions before choosing between the two options.                                                               

3. Certificates of deposit (CDs)

While CDs are designed for short-term investors, they do carry withdrawal restrictions based on the length of CD you purchase. For example, a three-month CD will tie up your funds for a few months, while a five-year CD means you can’t touch the money for – you guessed it – five years. The longer the time period, generally the higher the yield. However, CDs work best only if you know your funds will not be needed during that period. If you need the money sooner, you’ll generally pay early withdrawal penalties, which can take a big bite out of your overall return.                    

4. Short-term bond funds 

These mutual funds invest in short-term bonds, both corporate and U.S. government bonds. These funds are less risky than their equity market-equals, although there is some inflation risk. The advantage of a bond fund versus a CD is flexibility. You can withdraw money from a short-term bond fund without penalties, so your money is not tied up for a specific period.       

However, you will pay fund fees, which can eat into your return. Be sure to review the expense ratios of any short-term bond fund before you invest.                                      

5. Money market funds

Unlike money market accounts, money market funds are mutual funds that invest in short-term U.S. government and corporate debt. They are not FDIC insured. And, theoretically, prices for these funds can fluctuate, but they nearly always maintain a stable price, so they are considered a safe investment for short-term money. While your money is readily available, these funds are not generally the savings vehicle of choice for consumers who want to regularly access their cash.                                                 

How much return can you expect?

Of course, return varies based on the short-term instrument you select, as well as the environment in which you’re shopping around. Rates are variable.                                   

A great way to determine which vehicle is best for you is to consider these questions: 

  1. How much access do I need to my money? 
  1. How much do I need or want in FDIC insurance? 

There is a possibility of greater return from options like CDs or short-term bond funds, but it’s also important to consider the restrictions that will be placed on your money and the lack of FDIC insurance. 

If you want flexible access to your money and the extra protection of FDIC insurance, consider starting with a high-yield or money market account. For most investors with extra money sitting in a traditional checking or savings account, these are some of the best options. These accounts tend to offer higher returns than traditional savings accounts, have few restrictions, are easy to open, and are FDIC insured.

1 U.S. News & World Report, “Is My Money Safe? What You Need to Know About Bank Failures,” March 2023.

*Anonymized user data from the Empower Personal Dashboard™ as of 03/23.

** Empower Personal Cash™ is offered through Personal Capital Services Corporation (“PCSC”). PCSC is not a bank. Bank deposit products provided by UMB Bank n.a., Member FDIC. To participate in the program, you must open an account at UMB Bank, through which your funds will be placed in accounts at participating program banks. The advertised interest rates are paid by participating program banks, not by UMB. Your funds will be FDIC insured up to applicable limits while in transit through UMB Bank. PCSC receives a fee from each program bank in connection with the program that is based on the aggregate daily closing balance of deposits held in program accounts by such program bank. The fee may vary from program bank to program bank and will generally increase as the aggregate amount of funds held in program accounts with the program bank increases.

The Empower Personal Cash™ Annual Percentage Yield (APY) as of 3/29/23 is 4.25% APY (4.169% interest rate). The calculation for APY is rounded to the nearest basis point. Both the interest rate and APY are variable and subject to change at our discretion at any time without notice. 

The information provided in your account application is being provided by you to UMB Bank and PCSC simultaneously. Each of UMB and any EMPOWER company or affiliate may use this information in accordance with its respective privacy policy. Upon acceptance of the application, an account will be opened with UMB Bank.

FDIC insurance up to $250,000 (including principal & interest) per depositor per program bank. The cash balance you place through the program is swept to one or more program banks where it earns a variable rate of interest and is eligible for FDIC insurance. If the number of program banks changes, the aggregate amount of available FDIC insurance could be higher or lower. If you have deposits at a program bank, you should consider electing not to use that bank by following the opt out instructions we provide. If you do so, the aggregate amount of FDIC insurance available to you will be lower. If you do not do so, your existing deposits and deposits through Empower Personal Cash™ at that program bank will be combined for the purposes of FDIC coverage, which could result in some of your funds at that program bank being uninsured.

For more information on FDIC insurance coverage, please visit Customers are responsible for monitoring their total assets at each of the program banks to determine the extent of available FDIC insurance coverage in accordance with FDIC rules. Funds you place through Empower Personal Cash™ are not covered by SIPC.

There are no limits on the number of deposits or withdrawals you can make under the program. The maximum deposit limit per transaction is $250,000. The daily withdrawal limit is $25,000 unless (i) your account was opened prior to December 1, 2019, (ii) you are a Empower advisory client, or (iii) your account was opened and funded more than 60 days before the withdrawal, in which case the daily withdrawal limit is $100,000. For security reasons, there may be other limits on the amount, number, frequency, or destination of deposits or withdrawals you can make to or from the program. Transaction limits are subject to change at our discretion at any time.


Joel Kiskila

K. Joel Kiskila

Senior Director, Cash Operations

K. Joel Kiskila is the Senior Director, Cash Operations, at Empower. With a career progression that spans fintech, banking, lending, and payments, he is an expert builder of domestic and international operations.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. No part of this blog, nor the links contained therein is a solicitation or offer to sell securities. Compensation for freelance contributions not to exceed $1,250. Third-party data is obtained from sources believed to be reliable; however, Empower cannot guarantee the accuracy, timeliness, completeness or fitness of this data for any particular purpose. Third-party links are provided solely as a convenience and do not imply an affiliation, endorsement or approval by Empower of the contents on such third-party websites. 

Certain sections of this blog may contain forward-looking statements that are based on our reasonable expectations, estimates, projections and assumptions. Past performance is not a guarantee of future return, nor is it indicative of future performance. Investing involves risk. The value of your investment will fluctuate and you may lose money. 

Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements. 

Advisory services are provided for a fee by Empower Advisory Group, LLC (“EAG”). EAG is a registered investment adviser with the Securities and Exchange Commission (“SEC”) and subsidiary of Empower Annuity Insurance Company of America. Registration does not imply a certain level of skill or training.