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A Guide to Keeping Cash at Home

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Man with cash in hand that he's keeping at home

Most people are used to keeping cash at home for emergency situations. But how much cash is too much, and where you should you keep cash at home that’s safe?

Unexpected expenses can pop up in all kinds of ways: A car repair or a medical bill can catch you off guard, you might need money to help out a friend or relative. The best way to be prepared for life’s unexpected developments is to have an emergency fund that can cover your basic financial needs for three-to-six months. It’s typically advised that you stash your emergency funds in a liquid, high-yield savings account.

But for many people, keeping cash at home provides them with the peace of mind that comes with being prepared for emergency situations. How much should you keep on hand? The average daily amount of cash Americans held was $59 per person, according to the 2018 Diary of Consumer Payment Choice compiled by the Federal Reserve.

In this guide, we’ll explain how much cash to keep at home and how to keep your physical money safely.

Why do people keep cash at home?

For most people, keeping cash at home is a basic necessity, for multiple reasons. Cash is most convenient for small-dollar payments or purchases. Almost 87% of Americans use physical money for transactions valued under $25, according to the 2018 Diary of Consumer Payment Choice.

Some people like to keep a portion of their emergency funds at home, just in case. They feel secure when they know they have cash on hand for when natural disasters hit, the power goes out and you aren’t able to withdraw money from ATMs or banks.

For some people, privacy concerns are a reason to keep lots of cash on hand, including at home. Credit card companies and businesses can track what you buy, how much you spent on your purchase and where you made the purchase with credit cards. Some people would like to keep some purchases completely private. The only way to avoid leaving a digital trace is to use cash.

How to safely keep cash at home

If you keep physical money at home, safety is your first and foremost concern. FBI data show that there were more than 1.4 million burglaries in 2017, nearly 70% of which occurred at residential properties. Victims suffered a total of $3.4 billion in property losses.

Ken Tumin, founder and editor of, which along with MagnifyMoney, is a LendingTree-owned site, suggests you only keep at home the maximum amount that could be useful during natural disasters when power is cut off and ATMs are down.

“I would say having between $300 and $1,000 of cash at home can be useful for unexpected expenses that require cash or times of natural disaster,” Tumin said.

A staff member at Frontpoint, a Virginia-based home-security system company, suggested that having a heavy safe that’s not easy to move is a good option to keep cash safe at home. For more peace of mind, Tumin suggests, the best place to store physical money is a fireproof safe that’s attached to the foundation of the house.

Break-ins are not your only concern. In general, you should save money in places not prone to burglary, fire or flood, or discovery from people coming and going. If you don’t have a safe, stash your cash in fireproof or waterproof containers that can be locked.

Where you shouldn’t keep cash at home

Burglars are usually in and out of properties quickly during a break-in. Be sure to hide your physical money in places that are out of plain sight or not easily reachable, such as your attic or deep in the back of a closet.

The mattress is certainly not a safe spot to store cash. According to market research firm Edelman Intelligence, about 1 in 10 older Americans report hiding cash in their homes, including under the mattress. If the mattress is a known place where people keep their cash, the burglar is likely informed about the secret.

While It makes sense to hide cash in spots where burglars wouldn’t think to look, Tumin advised you avoid locations too obscure. “You might forget where you stashed your cash,” Tumin said. “Also, it may be very difficult for your family to find if you die or become incapacitated.”

Keep extra cash at the bank, not at home

Here’s a final piece of advice: Keep most of your money in an interest-earning checking account or savings account. Sure, it’s not bad to stash money at home, and keeping the right amount of cash on hand is necessary. But letting money loaf around your house means you’re missing out on the interest you could be earning at the bank.

A better place for your excessive cash would be a liquid deposit account that can accrue interest over time. After all, you probably will not touch your emergency fund frequently. The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 of each person’s money deposited per account, per bank. There is a slew of online banks that are FDIC-insured and offer higher interest rates on checking and savings accounts than those of brick-and-mortar banks.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Shen Lu
Shen Lu |

Shen Lu is a writer at MagnifyMoney. You can email Shen Lu at [email protected]

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The Ultimate Guide to Brokered CDs

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

You may have noticed that brokered certificates of deposit (brokered CDs) are offered as an investing option by your wealth advisor or online investing platform. You may also be enticed by the better interest rates offered by brokered CDs, while also wondering about the extra fees charged for them. What gives?

Like traditional CDs, brokered CDs are interest-bearing accounts that have a set term and yield. But instead of depositing money in a bank’s CD, you purchase brokered CDs through a middleman — your stock broker or financial advisor. These middlemen buy CDs in bulk from banks, negotiate higher rates, and charge extra fees.

Taken together, these factors make investing in the brokered option a different experience than depositing money in traditional CDs. Let’s take a look at the differences and help you understand when buying a brokered CD may give you an investing advantage.

What is a brokered CD?

Think of these CDs as investment products that are more like stocks, bonds or mutual funds than a bank deposit account. They are called “brokered” CDs because investment funds and brokerages purchase CDs from banks, credit unions and thrift institutions, and then resell them to you.

When middlemen buy CDs from banks, they shop around for the best rates and purchase from different sources. In addition, they buy in CDs in bulk. Taken together, these factors let them offer their customers more competitive rates — and some other key advantages — but it’s also why they charge fees for that extra convenience and yield.

Brokered accounts generally credit you with simple interest rates rather than compounding interest. Holders of the brokered option normally get paid simple interest monthly, quarterly, semi-annually or annually. Simple interest is calculated only on the principle you deposit in your brokered CD account. If you invest $10,000 at an interest of 3%, you will earn $300 in interest at the end of the year, and there will be no compounding of that interest at given intervals.

Bank CDs must be held to maturity, and if you withdraw your money early, you’re charged a penalty. Holders of brokered CDs can resell them on the secondary market before maturity. Like with other fixed-income investments, the market value of these CDs fluctuates as interest rates rise and fall. If interest rates are higher, holders will see a net loss if they sell early, but then again they can end up with a net profit if rates fall.

Like traditional CDs, brokered CDs are covered by FDIC insurance up to $250,000 per account, per institution. This gives them a huge advantage over speculative investments: You’re guaranteed to get your money back. If you’d like to invest more than $250,000 and maintain FDIC insurance, you can distribute your money among different brokered CD issues sold by the same middleman, as long as you keep each deposit under the $250,000 FDIC limit per bank.

Who buys brokered CDs?

The conventional wisdom is that individual savers tend to buy traditional CDs, while bigger institutional investors tend to buy the brokered option, with the former investing smaller amounts and the latter moving large amounts of money in and out of these brokered accounts as broader markets rise and fall.

But Ken Tumin, founder and editor of, another LendingTree-owned site, said that individual investors have more and more options for buying brokered CDs.

“For example, at Fidelity, brokered CDs can be purchased with a minimum deposit of $1,000,” Tumin said. “There are actually lots of advantages for investors to use brokered CDs instead of direct CDs, especially inside IRAs.”

Many experienced investors say that buying these CDs via online investment platforms simplifies the process of managing their CD investments, especially redeploying balances once the CDs mature. Handled properly, it can be a more convenient strategy than opening traditional CD account that are separate from your online brokerage account.

Benefits of brokered CDs

  • Simpler access to a wider variety of CDs. If you choose to buy new-issue CDs directly from banks, it can be complicated to compare and evaluate offers from different institutions. If you purchase these CDs through a middleman, you can quickly and easily select CDs of different terms from a variety of issuers in different states.
  • You don’t have to pay an early-withdraw fee if you sell your brokered CD early. You would have to lose some interest earnings with a traditional CD if you withdraw your funds prematurely. But the brokered option can be sold before maturity on the secondary market.
  • Brokered CDs may bear higher rates. Rates on these brokered accounts are often more sensitive to ups and downs of Treasury yields than traditional CDs are. When Treasury yields are rising, the rates offered on the brokered accounts are higher than those for traditional CDs of like maturity. But there’s no guarantee.

Risks with brokered CDs

  • You may lose money from selling your brokered CD prior to maturity. In an ideal situation, you want to keep your CD, brokered or traditional, until maturity. But if you have to sell your brokered CD before maturity in a rising interest environment, the demand for these CDs falls on the secondary market, and so you may have to sell your CD for less than you paid.
  • Some brokered CDs are callable. This means the bank has the option to “call”, or redeem it prior to maturity at a given price, as stated in the CD contract’s terms. If rates slide after you buy your CD, then the bank will exercise the call option. And then you may have to reinvest the money at a lower rate if you want to invest in a fixed-income instrument.
  • Suspiciously high rates may be a scam. Unscrupulous brokers of advertising above-market CD rates to attract people. Never fall for high rates without doing research on the broker, you can be exposed to the risk of losing money to fraud.

Brokered CDs vs. traditional CDs

All CDs are issued by banks. You purchase traditional CDs from banks directly. But the brokered accounts are purchased by brokerages in bulk from one bank and then resell them to retail investors.


Brokered CDs

Traditional CDs





Simple interest

Compounding interest





Intermediary fee

Early withdrawal fee

For traditional CDs, interest is calculated on a compounded basis, while simple interest is applied to brokered CDs. If you deposit the same amount of money for the same period of time, in general, you will earn more in interest if it’s calculated on a compounded basis than if it’s simple interest.

The brokered options are more complicated and riskier than traditional CDs. The brokered accounts are more sensitive to market interest rates. You may lose money if you sell your CD before it matures because the value can slump due to rising interest rates, and longer maturities have higher interest rate risk.

You can incur early withdrawal penalties if you choose to close a traditional CD prior to maturity. In general, the longer the CD term, the bigger the early withdrawal penalty you may have to pay.

If you buy a CD through a middleman, such as a brokerage or your financial advisor, you may have to pay a fee, and there also is a transaction fee when you sell your CD. Sometimes the costs are worth it if they provide you with CDs that bear higher interest than that of traditional CDs. But that’s not always the case.

It makes sense to buy a brokered account when the interest is greater than the yield on Treasury bonds with a similar duration. In addition, unlike traditional bank CDs that pay your interest at maturity, some brokered accounts offer the flexibility of periodic payments. You can be paid monthly, quarterly, annually, or at maturity.

Making the right CD choice

Compare rates for traditional CDs and brokered CDs. In general, you go for the most competitive rates possible. But you should also factor in the minimum deposit, the payment period and potential costs associated with each CD.

If you are more of a risk taker who prefers the flexibility of closing a CD at any time, then the brokered option is for you. Likewise, if you have lots of money to invest in a deposit account and don’t want to be subject to the $250,000 FDIC-insured limit, the brokered option is the way to go.

But if you plan to invest your funds for a long term and don’t want to handle the complexity and risk associated with a brokered CD, then you will be better off with a traditional CD.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Shen Lu
Shen Lu |

Shen Lu is a writer at MagnifyMoney. You can email Shen Lu at [email protected]

Advertiser Disclosure

Building Credit, College Students and Recent Grads, Credit Cards, Earning Cashback

How You Can Have a Good FICO Score Just One Year After Opening a Credit Card

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.


When I moved to the U.S. from my hometown of Hangzhou, in China, to pursue my undergraduate degree, the thought of establishing a credit history wasn’t even on my radar. I was, after all, an international student from China, where day-to-day credit card use had only recently caught on.

It wasn’t until I returned to the U.S. a few years later to pursue my master’s degree in Chicago that I realized I’d need to establish credit if I planned to launch my career in the States.

Just one year after I opened the card, I already had a solid FICO score – 720, to be exact. This score landed me safely in the “good” credit range, meaning I probably would not have trouble getting approved for new credit. I still had work to do if I wanted to get into the “very good” credit category, which starts at 740. But as a credit card newbie, I was not disappointed in my progress.     

Here’s how I did it.

I selected the right card for my needs

I wish I could say I diligently researched credit cards to choose the best offer and best terms, but honestly, I just got lucky.

Shortly before graduate school started, I visited friends in Iowa. When we were about to split the bill after dinner at a Japanese restaurant, I noticed that all my friends had a Discover card with a shimmering pink or blue cover. The Discover it® Student Cash Back was known for its high approval rate for student applicants, and had been popular among international students.

I thought, “Oh, maybe I should get this one, too.”

One of the friends sent me a referral link that very night. I applied and got approved quickly. We both received a $50 cash-back bonus after I made my first purchase — an iPhone — using the card through Discover’s special rewards program. I even received 5% cash back from the purchase.

Besides imposing no annual fee, the card had other perks, such as rewarding me with a $20 statement credit when I reported a good GPA (up to five consecutive years), letting me earn 5% cash back on purchases in rotating categories and matching the cashback bonus I earned over the first 12 months with my account. For me, it was a great starter card, but there are plenty of other options out there.

Check out our guide on the best credit cards for students.

I also could have explored other options of establishing credit, like opening a secured card, for example, which would have been a smart option if I hadn’t been able to qualify for the Discover it student card.

I never missed a payment

Despite my very limited financial literacy at the time, I attribute my strong credit score to the old, deeply ingrained Chinese mentality about saving and not owing.

I never missed payments, and I always paid off my balance in full each month, instead of just making the minimum payment. I didn’t want to pay a penny of interest.

Credit cards carry high interest rates across the board, but student credit cards generally have some of the highest APRs. This is because lenders see students like me — consumers without much credit history — to be risky borrowers, and they charge a higher interest rate to offset that risk.

Best Student Credit Cards November 2019

It wasn’t until much later that I learned payment history is critical to good credit. In fact, it is the biggest factor there is, accounting for 35% of my FICO score.

A Guide to Getting Your Free Credit Score

I was careful not to use too much of my available credit

My friends with more experience advised me to use as little of my available credit as possible. They warned me that overuse had hurt their credit scores in the past. This didn’t much sense to me, but I followed their advice, for the most part diligently.

I later learned this is almost as important as paying bills on time each month. Your utilization rate is another major factor in your FICO score. Credit experts urge cardholders to keep their credit utilization ratio below 30%. The lower, the better.

That means if you have three credit cards with a total available limit of $10,000, you should try to never carry a total balance exceeding $3,000, and you really should aim for much lower than that.

A Guide to Build and Maintain Healthy Credit

I beefed up my score with on-time rent payments

Keeping in mind the importance of not maxing out my credit card, I never considered paying my rent with the card. In fact, some landlords charge credit card fees for tenants who try to pay with plastic.

But I did find a way to establish credit by paying rent using my checking account.

I paid rent to my Chicago landlord through RentPayment, an online service. RentPayment gave me the option of having my payments reported to TransUnion, one of the three major credit-reporting agencies (the other two are Experian and Equifax). Because I knew I’d always pay bills on time, I signed up for the program.

This likely helped me improve my credit mix, another key factor influencing a credit score. The more types of accounts you show on your report, the better your score can be — if you make all your payments on time.

Yes, I made mistakes. This was my biggest one

My first foray into the world of credit wasn’t completely blip-free.

The only thing that hurt my credit, besides my short credit history, was that I had tried signing up for a Chase credit card, along with other ways to finance my iPhone, just a few days before I applied for my Discover card.

None of the other banks approved my applications, and my score went down at the very beginning, due to the number of “hard inquiries” against my credit report. Hard inquiries occur when lenders check your credit report before they make decisions regarding your application. Having too many inquiries in a short period of time can result in a ding to your credit score.

I’ve learned my lesson, though, and I’ll be cautious in the future when it comes to applying for a lot of credit in a short time period. Overall, it should be noted that you should not be afraid to apply for new credit — even when hard inquiries do hurt your score in the short term, it typically isn’t disastrous, and your score should recover fairly quickly as long as you are a responsible user of credit. Having more available credit can also help your utilization rate — as long as you don’t increase your charges, of course.

You can also check to see if you have prequalifed for any credit cards without triggering a hard inquiry.

If you’re new to the world of credit cards, consider taking the steps I outlined above, and you, too, may have a healthy credit score before you know it.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Shen Lu
Shen Lu |

Shen Lu is a writer at MagnifyMoney. You can email Shen Lu at [email protected]

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