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A mid‑size church in Ohio received a $1.5 million bequest in January and parked it in a savings account earning 3.75%.
Is 3.75% Enough?
That rate looks decent on paper, but inflation is humming around 4%‑5% these days. Real money. If the nest egg only keeps up with price hikes, the church’s future projects could feel tighter. And the board wonders if a smarter move could boost the stash. That’s a waste of money.
What Other Options Exist?
High‑yield savings accounts can push yields into the 4.5%‑5% zone — see NerdWallet’s latest list (NerdWallet). Money‑market funds, short‑term bond ETFs, or a ladder of CDs might also crank the return up a notch. I checked my budget last month and found a 5% CD saved me an extra $250 on $5k. So the church could split the bequest: part in a liquid account for day‑to‑day needs, part in a higher‑yield vehicle for the long haul. And you’ll still have the flexibility to move money if rates shift.
For a quick sanity check, look at the Walmart Savings Review that breaks down real‑world yields.
The IRS Refund Delays checklist reminds you to keep enough cash on hand for unexpected tax bills.
“At 3.75% we’re barely keeping pace with inflation, and that’s a waste of money for our mission,” said the church’s finance director.
The Bottom Line
- Shop around for high‑yield savings accounts that top 4.5%.
- Consider short‑term bond funds for a modest risk boost.
- Set up a CD ladder to lock in higher rates while keeping some cash accessible.
But remember, higher returns usually mean a bit more risk or less instant access. Because the bequest is meant to fund community programs, the church should keep enough liquidity to cover operating costs.
I moved my savings to a 5% account — which felt risky — but the extra cash was welcome (just a thought).
And in my experience, a balanced approach beats chasing the highest rate alone.
A huge relief when you see the numbers line up with the church’s mission goals.
And don’t forget FDIC insurance protects up to $250k per institution — diversify across a few banks if you go the high‑yield route (FDIC).
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