The 3 Smartest Places to Put Your Money in July 2024

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The summer months tend to be an expensive time of the year for a lot of people. For parents, that may mean grappling with summer camp fees or the cost of keeping children busy while school's on break. Summer is also a popular time to travel, so it may be that all of your spare cash is going toward an upcoming trip (or paying off a recent one).

But if you happen to have extra money at your disposal this July, then it's important to put it to good use. Here are three of the best places to stash your money right now.

1. A high-yield savings account

The nice thing about choosing a savings account for your money is that it gives you flexibility. You can take a withdrawal at any time, whether it's to attend a summer concert, fix something in your home, or invest if you decide you're ready to do so. And with savings accounts paying generously right now, you won't even have to resign yourself to a measly APY on the money you keep in the bank.

You should also know that at this point, stock prices are up across the board. The S&P 500 index, which is generally considered a measure of the market's performance on a whole, is up about 18% year to date. So you may be hesitant to buy stocks now.

But things could change later on in the year if the market cools off. Keeping cash in a savings account gives you that option. And while you could always keep some cash in a brokerage account, a high-yield savings account might pay you more interest while you wait.

2. A short-term CD

CD rates are sitting at their highest levels in years, with many 12-month (and shorter) CDs paying somewhere in the vicinity of 5.00%. But there's a chance that CD rates could start to fall as early as August.

The Federal Reserve is holding its next meeting at the very end of July. And at that time, the central bank may decide to finally implement its first interest rate cut -- something it's talked about doing since the start of the year in response to cooling inflation.

Once the Fed starts lowering its benchmark interest rate, CD rates are likely to follow suit. So now's a good time to lock in a CD at a great rate.

3. A long-term CD

Because it's known that the Fed intends to start cutting interest rates before the end of the year, banks are generally offering up their best APYs for shorter-term CDs -- those with a term of 12 months or less. With a longer-term CD, you may be looking at a lower APY.

For example, the APY on a 12-month CD right now could be 5.00% at one bank. The same bank could offer a 3-year CD at 4.00% APY. But if you're saving for a goal that's three years away, a 3-year CD could make more sense despite the lower APY.

With a window that short, you don't want to take on the risk of investing your money in stocks . You may not have enough time to ride out a market downturn.

But if you stick to a 12-month CD in an effort to snag the highest rate, you might end up in a situation where you're earning much less interest on your money during your second and third year of saving toward your goal. To put it another way, a 3-year CD might pay you more interest all in than a 12-month CD, even at a lower APY.

No matter what specific account you choose, it's a good month to have money to put in the bank. Consider your choices carefully, so you wind up happy with your decision.

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