Ninety-Day Savings Account

It sounds like a kind of financial self-help book for Millenials: The 90-Day Savings Account: Save Enough For Retirement in Just Three Months and Have Fun Doing It!

Actually, the ninety-day savings account is a short-term investment vehicle that kind of splits the difference between a regular checking account and other short-term savings vehicles, such as certificates of deposit. Passbook bank accounts, like checking accounts or savings accounts, don't offer much interest. Some don't offer any interest at all, or they more than cancel out any interest with offsetting fees. However, these accounts have advantages that outweigh the lack of return. You can withdraw funds as needed, keeping your assets liquid.

As an alternative landing spot for your short-time savings needs, you can put your money in investments like certificates of deposit, or CDs. These short-term vehicles offer (slightly) higher interest rates than bank accounts. However, you have to tie up your money for a certain period of time.

The ninety-day savings account provides liquidity like a passbook account. However, you typically receive a higher rate of interest compared to the nearly nothing that a common back account usually offers. It's called a ninety-day account because it exists for that length of time, locking in your interest rate. At the end of that period, you usually have the option to roll your money over into a new ninety-day account, with the interest rate resetting to whatever the new going rate is at that time.