With $100K to invest, consider different accounts and investments available to you, alongside potential taxes and fees.
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Whether you’ve received a windfall or steadily built savings over the years, $100,000 is a significant opportunity to start or continue building long-term wealth.
In this article, we’ll assume you’re already standing on solid financial ground: You have no high-interest debt, you’ve got an adequate cash cushion to cover an emergency and you can easily cover your monthly expenses.
So you’ve got a cool $100000 sitting around and need to park it somewhere safe for the next 6 months? Maybe you’re saving for a house down payment, planning a wedding or just waiting for the right long-term investment opportunity. Whatever your reason, finding the right short-term home for your cash is super important.
I’ve been in this exact position before and know the stress of trying to balance safety, accessibility, and actually earning something on your money. The good news? You’ve got options that can protect your principal while still generating some returns.
In this article, I’ll walk you through seven solid places to put your $100k for a short 6-month timeframe helping you make an informed decision that aligns with your specific needs.
What Makes a Good Short-Term Investment for $100k?
Before diving into specific options, let’s be clear about what we’re looking for in a short-term investment:
- Safety: With just 6 months, you can’t afford to lose principal
- Liquidity: You need access to your money when the time comes
- Reasonable returns: While you won’t get rich quick, you shouldn’t settle for nothing
- Low fees: Hidden costs can eat into your modest short-term gains
Now. let’s explore the seven best ways to invest $100k for the short term
1. High-Yield Savings Accounts
High-yield savings accounts are probably the simplest and most accessible option for parking $100k for 6 months.
How they work: These accounts function just like regular savings accounts but offer significantly higher interest rates, currently between 3% and 4.5%. You can open one at virtually any bank or credit union.
Benefits include:
- FDIC or NCUA insurance (up to $250,000)
- Complete liquidity with usually up to six withdrawals per month
- No market risk whatsoever
- Simple setup process
Potential drawbacks:
- Returns may barely keep pace with inflation
- Some accounts have minimum balance requirements
- Possible maintenance fees that could cut into your earnings
My take: For absolute safety and complete access to your funds, it’s hard to beat a high-yield savings account. I’d recommend comparing rates from several online banks, as they typically offer the most competitive rates without charging monthly fees.
2. Money Market Accounts
Money market accounts blend features of both checking and savings accounts, often with higher interest rates than basic savings.
How they work: These are deposit accounts at banks or credit unions that typically offer check-writing privileges and debit card access while still earning interest.
Benefits include:
- FDIC or NCUA protection
- Higher interest rates than regular savings accounts
- More access features (checks, debit cards)
- Low risk profile
Potential drawbacks:
- May require higher minimum deposits
- Limited transactions per month
- Slightly lower rates than some other short-term options
My take: Money market accounts make sense if you need occasional access to your funds while still earning interest. They’re essentially souped-up savings accounts with more features, so shop around for the best rates and lowest fees.
3. Money Market Funds
Don’t confuse money market funds with money market accounts! These are actually investment products offered by brokerages and mutual fund companies.
How they work: Money market funds invest in high-quality, short-term debt securities with maturities under one year. They come in several varieties:
- Treasury funds (invest in government T-bills)
- Prime/general purpose funds (invest in corporate paper)
- Government funds (99.5% in government securities)
- Tax-exempt funds (invest in municipal bonds)
Benefits include:
- Higher yields than bank accounts in many cases
- Very liquid with same-day access in most cases
- Conservative investment approach
- Diversified holdings reduce risk
Potential drawbacks:
- Not FDIC-insured (though still considered very safe)
- May have investment minimums
- Potential for small fluctuations in value
My take: Money market funds are slightly higher on the risk scale than bank accounts, but still very conservative. For 6 months, they’re a solid option if you want potentially better returns than a savings account while maintaining high liquidity.
4. Cash Management Accounts
Cash management accounts (CMAs) are hybrid financial products offered by brokerages and fintech companies.
How they work: CMAs combine features of checking, savings, and investment accounts in one place, often with competitive interest rates and added conveniences.
Benefits include:
- Competitive interest rates
- Integration with investment accounts
- User-friendly digital interfaces
- FDIC insurance (usually through partner banks)
- Fewer restrictions on transactions than savings accounts
Potential drawbacks:
- Newer product category with varying features
- May have minimum balance requirements
- Interest rates can change frequently
My take: If you already use a brokerage or are tech-savvy, a CMA offers simplicity and decent returns. Companies like Fidelity, Charles Schwab, and Betterment offer solid options worth exploring for your $100k.
5. Short-Term Corporate Bonds
Looking for a bit more yield without too much additional risk? Short-term corporate bonds might fit the bill.
How they work: These are debt securities issued by companies to raise capital, typically with maturities between 1-5 years. For a 6-month timeframe, you’d focus on bonds maturing very soon or short-term bond funds.
Benefits include:
- Higher yields than most bank products
- Regular interest payments
- Relatively liquid if you need to sell before maturity
- Diversification if using bond funds
Potential drawbacks:
- Not FDIC-insured
- Some price fluctuation risk
- Potential fees when buying or selling
- More complex than simple deposit accounts
My take: If you’re comfortable with slightly more risk, short-term corporate bond funds can boost your returns. Just be sure to focus on high-quality (investment-grade) bonds or bond funds with short durations if you definitely need all your money back in 6 months.
6. No-Penalty Certificates of Deposit (CDs)
Traditional CDs lock your money away for a set term with penalties for early withdrawal. No-penalty CDs solve this problem.
How they work: These specialized CDs let you withdraw your principal without fees after an initial short period (often 7 days), while still offering higher rates than savings accounts.
Benefits include:
- FDIC or NCUA insurance
- Higher rates than savings accounts
- No penalty for early withdrawal
- Fixed rate that won’t change during the term
Potential drawbacks:
- Slightly lower rates than traditional CDs
- Limited availability at some banks
- One-time withdrawal (you usually can’t take out partial amounts)
- May have minimum deposit requirements
My take: No-penalty CDs are perfect for a 6-month timeframe—you get better rates than savings with the flexibility to access funds if needed. Look for promotional rates at online banks, which often offer the most competitive terms.
7. Short-term U.S. Government Bonds
For the most conservative investors, short-term government bonds provide exceptional safety.
How they work: These are debt obligations issued by the U.S. Treasury with maturities ranging from a few weeks (Treasury bills) to a few years (Treasury notes).
Benefits include:
- Backed by the “full faith and credit” of the U.S. government
- Highly liquid secondary market
- Exempt from state and local taxes
- Available in various maturities to match your timeframe
Potential drawbacks:
- Lower yields than corporate bonds
- Need a brokerage account to purchase
- Small learning curve if you’re new to bonds
- Potential interest rate risk if sold before maturity
My take: Treasury bills (T-bills) with 3-month or 6-month maturities would align perfectly with your timeframe. You can buy them directly through TreasuryDirect.gov or through most brokerages. They’re considered the safest investment in the world, though they do typically offer lower returns than some other options.
How to Choose the Right Option for Your $100k
So with all these choices, how do you decide? Here’s my framework for picking the right short-term investment:
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Ask yourself about accessibility needs: Do you absolutely need all the money available at a moment’s notice, or can some be less accessible for higher returns?
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Consider your risk tolerance: Even for short-term investments, comfort with risk varies. Be honest about what will let you sleep at night.
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Evaluate tax implications: Some options (like Treasury bonds) offer tax advantages that might matter depending on your situation.
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Compare current rates: Interest rates change frequently, so compare the current offerings for each option.
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Consider splitting your $100k: You don’t have to put all your eggs in one basket! Allocate some to ultra-safe options and some to slightly higher-yielding choices.
My Personal Recommendation
If I had $100k to invest for 6 months right now, I’d probably split it something like this:
- 50% in a high-yield savings account for immediate accessibility
- 30% in Treasury bills matching my 6-month timeframe
- 20% in a short-term corporate bond fund for slightly higher yields
This gives me safety, liquidity, and a bit more return than just using a savings account alone.
Bottom Line
Investing $100,000 for a short 6-month period requires prioritizing safety and liquidity over returns. The seven options we’ve covered—high-yield savings accounts, money market accounts, money market funds, cash management accounts, short-term corporate bonds, no-penalty CDs, and short-term government bonds—all offer viable paths depending on your specific needs.
Remember that even small differences in interest rates can make a meaningful difference with $100k. For example, the difference between a 3% and 4% annual return on $100,000 over 6 months is about $500—not life-changing, but definitely worth considering!
Whatever option you choose, make sure to reassess as your 6-month window approaches its end. Your next move might be reinvesting in another short-term option or transitioning to a longer-term strategy depending on your evolving financial goals.
Have you had success with any of these short-term investment strategies? I’d love to hear about your experiences in the comments!
Handle your taxes now
Weve focused primarily on investing, but an equally important objective is to retain as much of that $100,000 lump sum as possible. Specific situations may require immediate action to avoid unwanted attention from the IRS. These scenarios include:
- I liquidated a 401(k) when I left a job. You have just 60 days after an employer cuts you a check to get that money saved in a workplace retirement account into either a Roth IRA or a traditional IRA. Otherwise, you’ll trigger a pretty hefty tax bill consisting of income taxes (the IRS treats the money as earned income for the year) and a potential 10% early withdrawal penalty. Read more about how to roll over a 401(k) to an IRA.
- I inherited an IRA: If you’ve inherited an IRA, you may be on a tight deadline. The rules about what beneficiaries can and cannot do vary, as does the timeline for taking action without incurring penalties or triggering extra taxes. It all depends on your relationship to the deceased (surviving spouses have different options than other beneficiaries), whether or not the former owner had started taking distributions before they died, and the type of IRA (Roth or traditional).
Pad your nest egg
Once youve determined how you want your money managed, time is of the essence to start putting that money to work in the market. A $100,000 lump sum offers a unique opportunity to pad your savings — and beyond, maxing out your retirement account (more on that later).
Perhaps you’re thinking, “With this money, we can pay for the kids’ education so they can graduate without any student loan debt!” Instead, consider this: Kids can get scholarships, take out loans or work through school. Similar opportunities arent available to retirees. Therefore, its wise to put your own financial needs, like saving for retirement, ahead of saving for your child’s college tuition.
Investing $70,000 of that lump sum and earning a 6% average annual return will mean an extra $300,000 in 25 years — the kind of padding that makes it less likely you’ll run out of money and have to move in with the kids. Use a retirement calculator to see how extra dollars affect when you can retire and how much monthly income you’ll have in the future.
I Don’t Know What to Do With My $100,000 in Savings
FAQ
Where should I invest $100K right now?
- 1. Stock Market (40-50%) Blue-chip stocks (Apple, Microsoft, Google) for stability. Growth stocks (AI, tech, EV sectors) for high returns.
- 2. Real Estate (20-30%) Buy rental property for passive income. Invest in REITs if you want real estate exposure without managing property.
- 3. Bonds & Fixed Income (10-15%)
Where is the best place to put money for 6 months?
- Genisys Credit Union – 4.40% APY.
- Climate First Bank – 4.34% APY.
- MutualOne Bank – 4.33% APY.
- PenAir Credit Union – 4.30% APY.
- Wings Credit Union – 4.30% APY.
- nbkc – 4.30% APY.
- Vibrant Credit Union – 4.25% APY.
- TotalBank – 4.25% APY.
How much interest will $100,000 make in a year?
and
or more, depending on the investment.
How to turn $100K into $1 million?
into
million, you can consistently invest in a diversified portfolio and add to your contributions over time.
A realistic path involves a mix of diversified investments like index funds, growth stocks, and real estate, with the goal of achieving a 7–10% annual return, which could take around 22 to 30 years.