Three people told me this month they were thinking of investing a large sum of money for a short-term purchase in the next 2-5 years. This could be a mistake.

These were purchases like a house in the next two years, tuition payments starting shortly, a vacation they are saving up for because they bougie like that.

I am an advocate of investing because it can compound wealth over time, but in the short term it can be inconsistent.

For instance, last week many stocks fell, with major indexes (groups of stocks) falling 1-3%.

The best financial strategy differs from person to person, but it also varies based on time frame.

If you are retiring in four years versus 40, you should have a different investing approach. Same goes if you are wondering what to do with a sum of money you intend to spend in two years, versus ten.

So how do you plan around a larger purchase that you are making in the next few years?

You have got your savings goal, but what is the best way to get there?

You can use CDs and make sure to pull your money out, day-trade in Fart Coin and bag $3 million, or engage in risky lending and kneecap those that don't pay you back.

While CDs (certificates of deposit, essentially a loan you give to a bank) can sometimes offer you a high return (right now most are hovering at just over 4%), they can also come with conditions and re-enrollment risks that you need to stay on top of.

Essentially, they can limit your flexibility sometimes if you want to have access to the cash quickly.

But investing can be a risky move for large, shorter-term purchases as well.

While investing is great for growing your money over decades, in the short term the return is a toss up.

So I often tell my friends saving for a larger purchase in the next one to five years to open a high-yield savings account (HYSA).

These accounts typically offer interest rates of 3-4% on money just sitting in the account. You can withdraw it at any point. And there are no fees.

So say you have $2,000 you earned over the summer in a job or internship that is going towards a trip in March.

If you park that in an HYSA with a 3% interest rate from August to March, you'd earn over $35 on your original $2,000.

Not a fortune, but guaranteed extra cash for just parking your money.

By contrast if you keep that in an average checking account making about 0.01%, you'd bag a cool 12 cents. Don't spend it all in one place.

This way you keep your money safe, accessible, and still learning.

If you are planning on making a larger purchase in the next one to five years, save it somewhere you can get interest. Don't invest it.

If I have sold you on the wonders of high yield savings accounts, then here are some accounts that I have heard good reviews on.

I use Wealthfront personally and really like that they allow me to organize my accounts into different buckets. While they don't offer an industry-leading rate (3.3% as of July 2026), you can get bonus rates by referring friends, and I am a fan of their intuitive user interface.

Also, A friend of mine uses Marcus by Goldman Sachs, and I have seen good reviews of it. It offers a higher rate than Wealthfront at 3.4% right now, which is solid.

You simply click the link and start an onboarding process that will ask you for social security number, banking info, and a few other things before you can start depositing funds.

I have already covered the pros, but some notable cons include:

Also, quick reminder that I am not sponsored by any of the tools I note here. I wish I was! These are just the tools I use.

Whether you are saving for a larger purchase in the next two, five, or ten years, open an HYSA.

These accounts simply give you money for having your cash sit in place.

So if you have an emergency fund chilling, a trip that you are saving up for, tuition payments that you want to park somewhere, put it in your HYSA.

Whatever your goals, an HYSA gives you an extra bonus as you save towards them. ;)

Thank you so much for being a part of this newsletter. I am grateful to write to you weekly and I hope this helps you feel more confident with your finances.

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