# Where to Park Cash Between Deals
Real estate investors sitting on capital between acquisitions face a core problem: traditional savings accounts pay next to nothing. The cash needs to work harder, but it also needs liquidity and safety.
High-yield savings accounts offer the fastest access to funds. Banks now pay 4 to 5 percent annually on balances, making them a stark improvement over standard accounts. The trade-off is minimal. Money Market Accounts function similarly, though they often require higher minimums (typically $10,000 or more) and limit monthly withdrawals.
Short-term CDs (certificates of deposit) lock money away for three to twelve months at rates between 4.5 and 5.2 percent. Investors who can forecast deal timing benefit here. Early withdrawal penalties exist but often run around one to three months of interest.
Treasury bills offer federal backing and competitive rates. Three-month and six-month T-bills now yield 4 to 5 percent with zero credit risk. The catch: the U.S. government issues them in $100 increments, limiting flexibility for small portfolios.
Money market funds bridge savings and investing. These mutual funds hold short-term debt instruments and deliver yields near 5 percent. They trade daily, giving investors quick access without penalty.
Some investors use bridge loans or hard money facilities to deploy capital faster, but those carry higher costs (8 to 15 percent rates) and make sense only when immediate deployment matters.
A common strategy: split the capital. Keep three to six months of operating expenses in high-yield savings for immediate flexibility. Park longer-term reserves in CDs or Treasury bills maturing around expected deal close dates. This approach eliminates the opportunity cost of dead money while maintaining liquidity.
The worst move remains leaving significant capital in a 0.01 percent savings account. Even a