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A bit of background:

My wife and I have a combined income of over $100k (before taxes, retirement, etc). We both put 15% of our paycheck into a 401(k), and we have no debts of any kind. We pay off our credit cards in full every month.

Currently, we are saving for a down deposit on a house, and as a result we have $35,000 that is just sitting in my bank account. We live modestly and save around $3000 a month so our savings are growing quickly.

My question is: what should I be doing with this money while we save for a down deposit? I know it is bad to simply keep money in a bank account due to inflation, missed investment opportunities, etc, but we want the money to be easily accessible when it comes time to purchase a house. Is there a wise, safe investment strategy I can make that will allow me to easily and quickly withdraw the money when the time comes?

Some of our friends advise us to purchase a house now, but we are trying very hard to get to a 20% down deposit, which would be around $50k for the kinds of houses we have in mind.

  • This question is unlikely to get an answer different than the ones in the linked response. I was actually typing one out very similar to the accepted answer before I saw this comment – Noah Jul 18 '14 at 17:15
  • Short version: If you're looking for full liquidity within 5-6 months, there aren't many options that will net you more than $150-$200 in earned interest in that time, and at those rates, you might as well just keep it in a high-yield savings account – Noah Jul 18 '14 at 17:16
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    Ah, sorry about the possible duplicate. I had searched for similar questions but missed that one somehow. I think we're a little closer to buying a house than the person who asked the other question, but the answers over there seem relevant to our situation as well. – user19120 Jul 18 '14 at 17:37