Here are the best options for short-term savings in 2024, experts say

After higher yields in 2023, investors are bracing for interest rate cuts that could put a damper on shorter-term savings.

Federal Reserve officials expect three quarter-percentage-point cuts in 2024, according to December meeting minutes released Wednesday. But there’s lingering uncertainty over when, or if, those changes may occur.

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With the Fed policy in limbo, savers have several options to consider for their cash, depending on their goals and timeline, explained Ken Tumin, founder and editor of DepositAccounts, which closely tracks rates.

Here are four of the best options for cash in 2024, according to Tumin and other financial experts.

With interest rates in flux, you can lock in a higher yield for 2024 with a certificate of deposit, or CD, Tumin said.

CDs earn interest for a set period. Rates may be higher than savings accounts, but you’ll typically incur a penalty if you need the money before the CD matures.

Currently, the top 1% average rate for one-year CDs is above 5.5%, as of Jan. 4, according to DepositAccounts. But “as we get closer to the Fed rate cut, CDs will start going down,” Tumin said.

The average penalty for a one-year CD is three months of interest, according to Tumin. But early withdrawal penalties can be higher, so it’s important to read the fine print.

If you may need the money in less than one year, you can opt for a penalty-free CD, which can “optimize yield without much work,” Tumin said.

Penalty-free CDs typically offer lower interest than a traditional CD, but you may find one…