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The biggest drawback of savings accounts is that interest rates can fluctuate over time. Just because a certain savings account is paying 4% annually now doesn’t mean that will be the case next year or even next month.
CDs allow you to lock in your interest rate for a specified period, and they typically pay a bit more than savings accounts. However, you’re committing to keeping your money deposited until the CD matures — or you will pay a penalty.
5. Buy mutual funds
Mutual funds are investments that pool investors’ money to purchase a diversified portfolio of stocks, bonds, and commodities, among other assets. Mutual funds can be actively managed funds or passive index funds.
In passive index funds, fund managers aim to replicate an index’s performance. For example, a mutual fund that tracks the S&P 500 invests in the 500 companies in that index to match its performance over time. Alternatively, actively managed mutual funds aim to beat a benchmark index by allowing their managers to choose the fund’s investments.
6. Check out ETFs
Exchange-traded funds are similar in nature to mutual funds, except they trade on major stock exchanges. Instead of choosing a specific dollar amount to invest, you choose how many shares of a particular ETF you want to buy.
Most ETFs — but not all — are index funds, meaning they aim to match the performance of a specific stock (or bond) index. For example, the Vanguard S&P 500 ETF (VOO +0.48%) is designed to track the performance of the S&P 500 over time.
ETFs, especially index funds, tend to have low investment expenses. This makes them excellent choices for investors building a portfolio from scratch or who simply don’t want the risk involved with investing in individual stocks.
7. Purchase I bonds
One interesting way to invest some of your $50,000 is through Series I savings bonds, commonly known as I bonds. I bonds are a special type of savings bond issued by the U.S. Treasury and designed to protect against inflation.
I bonds pay an interest rate that combines a fixed rate, which stays the same for the life of the bond, and an inflation-based adjustment, which resets every six months. The fixed rate for new bonds issued from November 2025 through April 2026 was 0.90%. Including the inflation adjustment, they guarantee a total annualized yield of 4.03% for at least the first six months.
The primary reason we suggest putting some of your money to work is that individual bond purchases are capped annually at $10,000 per person, one of the main drawbacks of investing in I bonds.