Cash is no longer trash

All the hikes to interest rates by the Federal Reserve are helping to resuscitate an investment that was left for dead for years: cash. Short-term Treasurys are now yielding more than they have in over a decade Consider a Treasury that returns an investor's money in one month. It carries a 4.66% yield, up from just 0.17% a year ago Besides short-term Treasurys, high-yield online savings accounts and certificates of deposit at banks are also paying out more in interest though the rises in their yields often haven’t been as dramatic. Of course, the increased yields are still not as high as inflation, which means investors socking money into short-term Treasurys aren’t keeping up with rising prices at the register. They also aren’t getting the upside of a potential rise in price over the long term as if they invested in stocks. But they’re also not exposing themselves to the big swings the stock market is going through. Another risk of holding cash is that yields will drop, which could force investors in the future to reinvest in something lower yielding. That can hurt investors looking to park that money somewhere for a long time, but the Fed has also indicated it could get more aggressive about raising interest rates