8 places you may earn between 3%-7% or more on your money right now (and psst: some have guaranteed returns)

High-yield savings account: Look for rates of 3%-4%

Even in times of high inflation, Americans need an emergency fund of somewhere between 3-12 months of essential expenses, pros say. The good news on that front: Many high-yield savings accounts are now paying more than they have in a decade with rates upwards of 3% (see the highest savings account rates you may get now here). 

Look for a savings account that is FDIC-insured, notes Greg McBride, chief financial analyst at Bankrate. “Online savings account may not keep up with inflation, but the high-interest rates will minimize how much you fall behind,” adds says Ken Tumin, founder at DepositAccounts says.

Added bonus: “Rates on these types of accounts are typically variable, so they can potentially move higher if market interest rates continue to rise,” says David Edmisten, certified financial planner at Next Phase Financial Planning. 

I-Bonds: Paying 6.89%

I-Bonds are government savings bonds that earn a combined fixed interest and variable inflation rate, adjusted semiannually. I-Bonds make the most sense for investors looking to protect themselves from inflation.

Short-term US Treasuries: May pay about 4%

If you want to save for short-term goals, these may be a good option now. Many short-term US Treasury yields are now in or near the 4% range. “Not a bad return for the short-term, and of course, they’re [virtually] risk-free returns,” says certified financial planner Bruce Primeau at Summit Wealth Advocates. Treasury Bills have a maturity of one year or less and are usually sold in denominations of $1,000.

TIPS (Treasury Inflation-Protected Securities): Paying a guaranteed 1.125%, plus principal increases by inflation

“TIPS can protect your future buying power, but hold them in a tax-advantaged retirement account due to the phantom income generated when inflation adjustments increase the bond’s face value,” says McBride. This phantom income arises when TIPS principal value is adjusted upwards because the IRS considers the change in value as income. 

High-yield money market: Many are paying between 3.5% and 4%

High-yield money market accounts are currently paying between 3.5% and 4%, says certified financial planner Joe Favorito at Landmark Wealth Management. And while they’re similar to high-yield savings accounts, they offer the ability to write checks and pay bills directly from the account, unlike savings accounts. One caveat to consider: “These rates are not guaranteed and can reduce at the end of the promotional term. You also may be limited to a certain number of transactions per month into or out of the account. Additionally, you’ll pay state and federal income tax on the interest earned,” says Shawn Wilson at Integrated Financial Partners. (See the highest MMA account rates you may get now here). 

CDs: Many are paying between 2.25% and 4.40%

CDs offer higher interest rates than high-yield savings accounts, but the penalty for taking money out before the account reaches maturation should be considered before opening a CD account. Returns are [virtually] guaranteed with CDs, but CD rates may not be high enough to keep pace with inflation.  Some of the highest paying CDs include CapitalOne  with a 4.15% APY, BMO with a 4.50% APY and Bask Bank, which is paying 4.03%. (See the highest CD rates you may get now here). 

Pay down high–interest debt: 10% or more

If you’re in credit card or another type of high-interest debt, work on a plan to pay that off as credit card interest rates, for example, are at an all-time high, according to Bankrate data. Once you’re not paying those high-interest rates, it’s like money back in your pocket.

And, adds Primeau: “With variable interest rate lines of credit on the rise, paying these off reduces monthly interest expense but also creates more opportunity to borrow at a potentially lower interest rate in the future.” 

Commodities: Payout depends

If you’re willing to take some more risk, “commodities tend to do well during periods of high inflation,” says Favorito. Goldman Sachs writes that: “From a fundamental perspective, the setup for most commodities next year is more bullish than it has been at any point since Goldman Sachs Commodities analysts first highlighted the supercycle in October 2020.”

Municipal Bonds: Payout depends but often upwards of 3%

A municipal bond portfolio may be attractive for higher-income households due to the unique taxation they offer. “Municipal bonds are federally tax-exempt and if you buy bonds from your state of residence, they are state tax exempt also. Rates are attractive on municipals with the average yield around 3.4% currently, and the taxable equivalent for someone in the highest tax bracket would be almost 5.4%. Like US Treasuries, the municipal market does have volatility, so bonds not held to maturity could be sold under par value and lose principal,” says Wilson.