Saving for a house: where to keep the down payment
Money for a home purchase in the next few years needs two things: it must be there when you need it, and it should not lose ground to inflation. The CFPB's home-buying guide covers budgeting and loan shopping; here is where the savings can sit.
Match the money to the date
- Need it within a year: high-yield savings, money-market funds, Treasury bills.
- One to three years: CDs or Treasury notes that mature before your target date.
- Avoid putting a near-term down payment in investments whose price can fall a lot, such as stocks or long bonds.
Every bit of after-tax yield helps
On a down payment fund, the difference between a typical bank rate and the best low-risk yields can be meaningful over a couple of years. IncomeGrid ranks every item by yield after tax for where you live: federal, state and each investment type (Treasuries, municipal bonds, corporate bonds, funds, REITs and filed offerings are each taxed differently).
Find low-risk options
Filter IncomeGrid's 40,000+ investment options screened to risk levels 1–2 and short terms to see what fits your timeline.
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Sources
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