It would be nice to throw everything into aggressive investments and forget about it, knowing time will ride out volatility and eventually produce handsome returns. But major expenses do creep up and so does the need for ready cash. Wall Street's bull market might tempt investors to take a chance on stocks, and stable interest rates and prices might make long-term bonds appealing. But one brief market slump and there goes the down payment. Money market funds and money market accounts are perennial favorites for short-term money and right now carry some respectable yields in the 5 percent range.
Money funds offer both security and liquidity.
Yields were averaging nearly 5 percent in early July, however, those willing to do some legwork could find even higher rates. They include check-writing capabilities. Yields are also slightly higher, averaging around 5.3 percent. Yields are nearly 5.5 percent on average. They too provide check-writing privileges.