Where can I put $50k for 2 years while I'm in school and transitioning back to full-time employment? I eventually want to purchase a house, but I'm not sure where I'm going yet. I'm a full-time grad student currently renting a small apartment while in school.

I have no debt with no dependents. Tuition and living expenses are covered with GI Bill and part-time work. I have an additional $30k as a rainy day fund. I don't feel comfortable putting anything away long-term at the moment since my income is so low.

Previously, when I had a longer time horizon, I had it in PRPFX, but had to liquidate in 2012. It's making .80% APY in a savings account right now.


Additional info on Risk Tolerance: I could withstand a 5% loss on principal. Ideally, though, I would like to preserve the money I have in real terms.

  • 1
    2-year certificates of deposit are paying about 1.2% currently, and are about as safe as the savings account. (Some carry a promise that if the government increases the prime rate, the CD rate will adjust upward.)
    – keshlam
    Sep 25, 2014 at 22:10
  • 2
    It would be helpful to know about your tolerance for risk. Answers so far have focused on extremely low-risk (and low-return) options like bank accounts and CDs. But since this isn't money that you need to live on immediately, you may be able to take more of a risk for a higher return. For instance, how bad would it be for you if you lost 5%, 10%, 20%? Would it just mean buying a slightly cheaper house, a slightly higher mortgage, or waiting slightly longer? Or would it completely upset your life plans? Sep 26, 2014 at 15:49
  • @NateEldredge Thanks for your comment. I edited in the summary.
    – Troy
    Sep 26, 2014 at 16:09
  • Would you consider low risk bond accounts? You can open a Vanguard account, for example, and invest $50k into the admiral shares of tax-exempt bond funds.
    – Matthew
    Sep 26, 2014 at 16:17

2 Answers 2


Where you can put the money really depends on your risk tolerance. You could take $50k and put it into a good share class municipal and government bond fund that would likely be tax exempt. In a few years span I don't think you're likely to lose much in a tax-managed bond fund but it's certainly possible!

Here is a link for Vanguard tax-exempt bond funds by state of residency:


These funds have returns well exceeding CD's or standard savings accounts. Risk of loss is real, but returns are possible.


You can put it in a CD, or use a CD investment service like http://www.jumbocdinvestments.com/ (no affiliation).

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