Where to Keep Money You Need Within Five Years
The timeline picks the account. Everything else is detail.
At a glance
Figures checked 1 Sep 2026
Typical APY
Roughly comparable across options at present
Access to cash
Varies from immediate to locked
Protection
Bank products insured to $250,000; Treasurys backed by the government
What to take away
- Under one year: high-yield savings or T-bills.
- One to three years: CDs, a CD ladder, or a Treasury ladder.
- Three to five years: mostly cash, with any market exposure sized so a fall would not derail the plan.
| Timeline | Suitable | Avoid |
|---|---|---|
| Under 12 months | High-yield savings, T-bills, money market funds | Anything with market risk |
| 1–3 years | CDs, CD or Treasury ladders | Stock funds |
| 3–5 years | Mostly cash; a modest conservative allocation | Concentrated equity |
| 5 years+ | A diversified portfolio becomes reasonable | Holding it all in cash |
The five-year line is not arbitrary. Over shorter periods the range of possible equity outcomes is wide enough that a specific goal can be missed badly, and there is no time to recover before the money is needed.
The reverse error is just as costly. Money that will not be touched for twenty years sitting in a savings account loses purchasing power every year against inflation near three percent.
Common questions
Reasonable for the two to five year range. It can still fall modestly if rates rise, so it is not a cash substitute.