Explore our services

Wealth Planning
Receive a multigenerational wealth plan with personalized strategies and guidance.
Investing
Experience a holistic approach to investing, centered on your goals and priorities.
Lending
Unlock liquidity with a variety of customized lending products, strategies and solutions.
Banking
Access a variety of banking products and services tailored to your needs.
Family wealth platform
Explore our platform of specialized services designed for ultra-high-net-worth clients.

How to enhance the yield on your excess cash

March 21, 2024

Cash is essential to cover immediate expenses and emergencies, but yours may not be reaching its full potential. Learn how to make the most of your cash holdings.

Key takeaways

The optimal strategy for managing your excess cash depends on your personal situation and goals – including your time frame, desired returns and risk tolerance.
Various products – including brokered CDs and money market funds – may offer higher yields than what you could earn with a traditional savings account.
It’s important to understand the risks associated with any product you’re considering. Federally insured deposits offer a layer of protection that uninsured investments don’t always provide.

Contributors

Angelena Mascilli

Managing Director, Head of J.P. Morgan Wealth Management Banking

The phrase “cash is king” has some merit, but it ignores the fact that building long-term wealth depends on other types of investments with more potential to grow. At the same time, you’ll likely need some cash to cover everyday expenses, and you may want to keep your emergency fund in a readily accessible cash account.

Like most financial decisions, determining how to make the most of your cash depends on your personal situation and goals. You may want to ask yourself what level of returns you’re aiming for, when you think you’ll need the funds and how much risk you’re willing to accept.

Let’s look at a few financial products that might pay attractive rates on your cash. Once you know the characteristics of these different options, it will be easier to make an informed choice about the most advantageous way for you to store your excess cash.

High-yield savings

Through your brokerage or wealth management firm, your advisor may be able to offer you a product or account that pays competitive rates on your cash deposits. Generally, these products or accounts enjoy the same protection from the Federal Deposit Insurance Corporation (FDIC) as traditional bank savings products but often provide a more competitive interest rate than traditional bank savings. You may need to make a steep initial deposit to access this offering, but the payoff for storing your money there rather than a traditional bank savings is likely to be positive.

Certificates of deposit (CDs) and brokered CDs

Certificates of deposit (CDs) are a type of FDIC-insured deposit product that holds a fixed amount of money for a fixed period of time. In return, the CD holder will earn interest on the deposit over that fixed period of time, and once the CD reaches maturity, the CD holder also receives their principal amount in full. If you have cash on hand that does not require overnight access, and can possibly be held for a fixed period of time, you can typically benefit from a higher rate than you would earn on a more liquid savings account. In addition, CDs can be particularly advantageous when interest rates are headed lower because they allow you to lock in higher yields for a fixed period of time.

You can open CD accounts directly through the bank (i.e., bank CDs), or purchase them through a brokerage account (i.e., brokered CD). Brokered CDs may offer higher yields and flexibility than standard bank CDs. In example, Bank CDs typically charge a penalty if you withdraw the money before maturity, whereas with Brokered CDs, you may be able to resell the CD on the secondary market (fees may apply). Brokered CDs do come with increased complexity and risks, including call features where the issuing bank may redeem the CD before maturity.

Money market funds (MMFs)

A money market fund (MMF), on the other hand, is a type of mutual fund that invests in low-risk securities with the aim of maintaining a net asset value (NAV) of $1 per share, distributing any excess profits as dividends to shareholders. The most common MMFs invest in government securities, tax-exempt municipal securities, and corporate and bank debt securities. An investment in a money market fund is not insured or guaranteed by the FDIC or any other government agency; however clients may be offered some protection by the non-profit Securities Investor Protection Corporation (SIPC).

Treasuries

Considered low-risk investments because of their backing by the U.S. government, Treasuries could represent another place to park your cash. Although you can invest in government bonds over the long term, Treasury bills (“T-bills”) may be a particularly suitable place to store some cash because they mature within one year of being issued. In other words, T-bills could generate lower-risk yield without tying up your funds for an extended period.¹

Bottom line

Cash may not be the best investment in terms of growing your wealth for the long term, but you can still aim to make the most of the cash that you hold. This might mean exploring higher-yielding options, from money market funds to CDs, searching for a product whose risk profile and time commitment are suitable for your needs.

A J.P. Morgan advisor can help you develop a strategy for managing your cash that supports you along the path toward your overall financial goals.

References

J.P. Morgan Wealth Management, “Diversify your investment portfolio with fixed income securities.”

Connect with a Wealth Advisor

Our Wealth Advisors begin by getting to know you personally. To get started, tell us about your needs and we’ll reach out to you.

Connect now

IMPORTANT INFORMATION

This material is for informational purposes only, and may inform you of certain products and services offered by J.P. Morgan’s wealth management businesses, part of JPMorgan Chase & Co. (“JPM”). Products and services described, as well as associated fees, charges and interest rates, are subject to change in accordance with the applicable account agreements and may differ among geographic locations. Not all products and services are offered at all locations. If you are a person with a disability and need additional support accessing this material, please contact your J.P. Morgan team or email us at accessibility.support@jpmorgan.com for assistance. Please read all Important Information.

GENERAL RISKS & CONSIDERATIONS. Any views, strategies or products discussed in this material may not be appropriate for all individuals and are subject to risks. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. Asset allocation/diversification does not guarantee a profit or protect against loss. Nothing in this material should be relied upon in isolation for the purpose of making an investment decision. You are urged to consider carefully whether the services, products, asset classes (e.g. equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. You must also consider the objectives, risks, charges, and expenses associated with an investment service, product or strategy prior to making an investment decision. For this and more complete information, including discussion of your goals/situation, contact your J.P. Morgan representative.

NON-RELIANCE. Certain information contained in this material is believed to be reliable; however, JPM does not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this material. No representation or warranty should be made with regard to any computations, graphs, tables, diagrams or commentary in this material, which are provided for illustration/reference purposes only. The views, opinions, estimates and strategies expressed in this material constitute our judgment based on current market conditions and are subject to change without notice. JPM assumes no duty to update any information in this material in the event that such information changes. Views, opinions, estimates and strategies expressed herein may differ from those expressed by other areas of JPM, views expressed for other purposes or in other contexts, and this material should not be regarded as a research report. Any projected results and risks are based solely on hypothetical examples cited, and actual results and risks will vary depending on specific circumstances. Forward-looking statements should not be considered as guarantees or predictions of future events.

Nothing in this document shall be construed as giving rise to any duty of care owed to, or advisory relationship with, you or any third party. Nothing in this document shall be regarded as an offer, solicitation, recommendation or advice (whether financial, accounting, legal, tax or other) given by J.P. Morgan and/or its officers or employees, irrespective of whether or not such communication was given at your request. J.P. Morgan and its affiliates and employees do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transactions.

Legal Entity and Regulatory Information.

J.P. Morgan Wealth Management is a business of JPMorgan Chase & Co., which offers investment products and services through J.P. Morgan Securities LLC (JPMS), a registered broker-dealer and investment adviser, member FINRA and SIPC. Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. Certain custody and other services are provided by JPMorgan Chase Bank, N.A. (JPMCB). JPMS, CIA and JPMCB are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states.

Bank deposit accounts and related services, such as checking, savings and bank lending, are offered by JPMorgan Chase Bank, N.A. Member FDIC.

This document may provide information about the brokerage and investment advisory services provided by J.P. Morgan Securities LLC (“JPMS”). The agreements entered into with JPMS, and corresponding disclosures provided with respect to the different products and services provided by JPMS (including our Form ADV disclosure brochure, if and when applicable), contain important information about the capacity in which we will be acting. You should read them all carefully. We encourage clients to speak to their JPMS representative regarding the nature of the products and services and to ask any questions they may have about the difference between brokerage and investment advisory services, including the obligation to disclose conflicts of interests and to act in the best interests of our clients.

J.P. Morgan may hold a position for itself or our other clients which may not be consistent with the information, opinions, estimates, investment strategies or views expressed in this document. JPMorgan Chase & Co. or its affiliates may hold a position or act as market maker in the financial instruments of any issuer discussed herein or act as an underwriter, placement agent, advisor or lender to such issuer.

Check the background of our firm and investment professionals on FINRA's BrokerCheck

To learn more about J. P. Morgan’s investment business, including our accounts, products and services, as well as our relationship with you, please review our J.P. Morgan Securities LLC Form CRS and Guide to Investment Services and Brokerage Products.

This website is for informational purposes only, and not an offer, recommendation or solicitation of any product, strategy service or transaction. Any views, strategies or products discussed on this site may not be appropriate or suitable for all individuals and are subject to risks. Prior to making any investment or financial decisions, an investor should seek individualized advice from a personal financial, legal, tax and other professional advisors that take into account all of the particular facts and circumstances of an investor's own situation.

This website provides information about the brokerage and investment advisory services provided by J.P. Morgan Securities LLC ("JPMS"). When JPMS acts as a broker-dealer, a client's relationship with us and our duties to the client will be different in some important ways than a client's relationship with us and our duties to the client when we are acting as an investment advisor. A client should carefully read the agreements and disclosures received (including our Form ADV disclosure brochure, if and when applicable) in connection with our provision of services for important information about the capacity in which we will be acting.

INVESTMENT AND INSURANCE PRODUCTS ARE: • NOT FDIC INSURED • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • NOT A DEPOSIT OR OTHER OBLIGATION OF, OR GUARANTEED BY, JPMORGAN CHASE BANK, N.A. OR ANY OF ITS AFFILIATES • SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED

J.P. Morgan Wealth Management is a business of JPMorgan Chase & Co., which offers investment products and services through J.P. Morgan Securities LLC (JPMS), a registered broker-dealer and investment adviser, member FINRA and SIPC Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. Certain custody and other services are provided by JPMorgan Chase Bank, N.A. (JPMCB). JPMS, CIA and JPMCB are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states.

Please read additional Important Information in conjunction with these pages.