You Have $100,000 in Cash. Here Is Where to Put It

A big cash balance looks like one number. It is really several jobs: an emergency, a bill you can see coming, and money with no date yet. Each job needs a different kind of account. This chapter shows one way to split $100,000. Every rate in it is made up. For today's real rates, see our savings page and our CD page.

Why split it at all?

A single pile in one account has to do every job. If it sits in an account for fast access, it may pay less than it could for money you will not touch for two years. If it all sits in a CD, an emergency could cost you a penalty. Splitting lets each slice fit its job.

This chapter uses the idea from the Liquidity chapter on how much cash to keep in three tiers. It does not repeat the full method. It applies it to one balance.

What is the example?

Say you have $100,000 and your essential costs are $5,000 a month. These are made-up numbers.

Slice 1 is $30,000. That is six months of $5,000. Keep it where you can reach it in a day or two with no penalty. A savings account at an insured bank fits. Three to six months of essential costs is a common range, and your own number depends on how steady your income is. The Liquidity chapter helps you size it.

Slice 2 is $40,000. This is money you might need in the next one to two years. Split it into four $10,000 CDs ending at 6, 12, 18 and 24 months. When the first one ends, you can spend it or renew it. This is a CD ladder. The chapter on building a CD ladder shows the steps and what it costs in interest.

Slice 3 is $30,000. This is money with no date yet. Keep it in a savings account. Once a year, compare it with other cash options. Chapter 6 covers how tax can change that comparison.

What does it earn?

Here is one year of interest at made-up rates. A savings rate of 4.00% is used for slices 1 and 3. The four CD rates rise with the term, from 3.90% to 4.30%. Each CD is assumed to renew at the same rate. Interest is simple.

For comparison, the FDIC national average savings rate was 0.37% on its page dated September 21, 2026. At that rate, $100,000 earns $370 in a year. The example plan earns $3,680 more. Today's top rates we track are 4.27% for savings and 5.00% for CDs. They may differ from the made-up rates above.

Why would anyone lock part of it?

A savings account pays the same whether or not you need the money soon. A CD asks you to commit, and in return it fixes your rate for the term. If savings rates fall, the CD keeps its rate. If savings rates rise, the CD does not catch up until it ends.

The ladder adds a second benefit. Money that takes an extra step to reach is harder to spend by impulse. Each rung also gives you a decision date every six months. On that date you can spend the money, renew it, or move it to a better rate.

The cost is real too. You give up quick access to that slice. That is why slice 2 holds only money with a date, and slice 1 holds the emergency money.

Is $100,000 insured?

The FDIC insures $250,000 per depositor, per insured bank, for each account ownership category (FDIC). A $100,000 balance in your name at one insured bank is under that limit. Joint accounts, trusts and retirement accounts follow their own rules. If your balance grows past $250,000 at one bank, the chapter on keeping more than $250,000 insured shows how.

You do not need three banks. One insured bank can hold the savings account and the CDs. Look for a second bank only if your balance outgrows the limit, or if another bank's terms are clearly better after the four fine-print checks.

What if your numbers differ?

Change the three inputs. Your monthly essentials set slice 1. Your known costs in the next two years set slice 2. What is left is slice 3.

This is an example, not advice for your case. Interest is taxable income. The chapter on tax and money funds covers how it can matter.

What to do next

1. Write your monthly essential costs.
2. List any costs with a date in the next two years.
3. Fill slice 1, then slice 2, then slice 3.
4. Run the four fine-print checks on each account.

Limits of this guide.

• Every rate, balance and monthly cost in the example is made up.
• Interest is simple and each CD is assumed to renew at the same rate, which real CDs may not.
• This chapter is not advice for your case. It does not cover investing, taxes or special account types.