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What is the best way to earn interest with money I inherited?

My mother who was a retired federal employee passed away in March. My sister and I each received $40,500 which was placed into a total control account earning an effective annual yield of just 0.90 percent until I decide what to do with it. We are also waiting on her lump-sum retirement payout, so until that comes in I was thinking of using some of this money as a down payment on a house next year. However, until I decide what to do, what's the best way to earn more interest with this money?

Retirement, Real Estate
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June 2018

You've suggested you plan to use the money for a downpayment on a home as early as next year. That should rule out investing it in the market, as we don't know how markets will react in the short term. It'd be a shame to invest it, and want the funds for a downpayment a year from now only to have less actual dollars to use! 

Instead, consider using a high-yield online savings account. Nerdwallet always ranks their favorite high yield accounts, but some common ones are Marcus, Ally bank, and Synchrony. They offer higher yields than traditional banks and would get you the most bang for your buck. I believe they're around 1.5-1.7% currently. 

These accounts are FDIC insured as well and work great for holding "emergency funds". We have all our clients typically hold 3-6 months worth of living expenses in such an account for a buffer against unexpected expenses 


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