In a year when short-term rates still look appealing and the stock market keeps reminding investors that rallies do not move in straight lines, uninvested cash has a rare amount of optionality.
The right move depends on when you need the money and how much volatility you can tolerate.
With that in mind, here are three straightforward paths for putting cash to work now.
Three options for different time frames
Start with the safest bucket: money you know you will need soon. Three-month Treasuries and government money market funds are built for that role.
The 3-month Treasury yield was 4.03% on September 18, 2025, according to Federal Reserve data, which keeps the short end of the curve competitive relative to many bank accounts.
Funds that invest in T-bills typically pass through most of that yield, after fees. The appeal is simple: daily liquidity for funds, near-zero credit risk, and interest that is state tax free on Treasuries.
If you are parking an emergency reserve or saving for a near-term purchase, this is still the market’s cleanest solution.
If your spending needs are a year or two away, consider locking in a slice of today’s rates with a short ladder of Treasuries or insured certificates of deposit.
A ladder splits money across staggered maturities, so something is always coming due to reinvest, which reduces the guesswork around future rate moves.
The one-year Treasury yielded 3.61% as of September 18, which is below the 3-month yield.
That inversion means you are not getting paid much extra to go long, but a simple 6-, 12-, and 18-month ladder can still deliver rate visibility and remove the temptation to time the next cut.
For inflation protection inside the safe bucket, a small allocation to Series I savings bonds can help.
The current composite rate for I bonds issued from May through October 2025 is 3.98%, and while purchase limits apply and the first year is illiquid, the inflation adjustment and state tax exemption are useful features for conservative savers.
Money that you do not expect to touch for five years or longer belongs to growth assets.
A measured plan to average into a low-cost, broad-market index fund can turn market noise into an ally. Dollar-cost averaging spreads entry points and reduces the odds of buying a single peak.
The discipline matters more than the cadence, some investors automate weekly or biweekly contributions, others set calendar reminders to deploy a fixed amount every month.
The point is to move from intention to execution while keeping costs low and diversification high.
If you prefer a smoother ride, a balanced fund that mixes stocks and investment-grade bonds can blunt drawdowns, though returns will likely lag a pure equity index over a full cycle.
Whichever mix you choose, segment your cash by time horizon before you buy. Funds needed in the next 6 to 12 months fit best in T-bills or government money markets.
Savings earmarked for the next 12 to 36 months can sit in a short ladder of Treasuries or CDs that regularly roll over.
Long-horizon money can be put to work in equities on a schedule you can stick with. This simple sorting reduces the urge to raid long-term investments for short-term needs, and it keeps you from chasing last month’s winner.
Taxes and account type also matter, treasury interest is exempt from state and local taxes, which can tilt the math toward bills for investors in high-tax states.
Stock funds belong naturally in tax-advantaged accounts if you have room, since reinvested dividends and capital gains can compound without an annual tax bite.
If you are investing in taxable accounts, look for index funds and ETFs known for tax efficiency.
Costs are the last quiet lever you control; money market funds publish expense ratios, Treasury auctions are fee-free when you buy directly, and many brokered CDs carry no commissions if you hold to maturity.
On the equity side, expense ratios of one or two basis points are now common for broad U.S. index ETFs. Over years, lower costs can be worth more than small differences in entry timing.
The market will keep shifting as the Federal Reserve navigates inflation and growth. You do not need to predict the next move to make progress. Match the tool to the timeline, automate what you can, and let time do the heavy lifting.
