Allow me to ask you a straightforward question: Do you remember a time when you’d look at your bank balance proudly and say, “I have a lot of cash sitting here.” Me too. At least that’s how I felt, until I spoke to a Certified Financial Planner (CFP) who told me something harder than inflation: “Too much cash can actually make you poorer.”
I know… a little rude.
But very true.
You might feel good about cash, but when inflation decides to show up like that cousin that hasn’t left the party, your savings start to melt away. And I’m not talking about summer ice cream aesthetics — I’m talking about a puddle on the floor. So I started learning, listening to advice from CFPs, and then realized an important fact: Smart people don’t just save money… they allocate it.
And today, I’m going to share the 3 most effective accounts to keep your savings if you’re looking to protect your wealth, combat cash risk, and actually grow your savings instead of watching it lose value each year.
And I will share how I allocate the money personally — because a potential traditionalist’s trust of the official financial advice is better when they are taking advantage of the allocation themselves.
Why Holding Too Much Cash Makes You Poorer
Let’s be honest: cash feels secure because it’s not going anywhere.
You know what else doesn’t move? A rock.
That’s what your money turns into when it sits in a low-yield checking account, a rock that inflation kicks around every year.
Inflation eats idle cash.
When prices rise 3–6% every year, and your bank pays you a generous 0.01% interest (thanks?), your cash is losing value while it seems to stay the same.
And what does that mean?
Your cash is slowly dwindling, all while you gawk at it on your bank’s mobile app. Ouch.
If you’ve ever found yourself asking, “Why does it feel like I’m saving, but I’m going nowhere?” — there’s your answer.
So, how can you escape this terrible financial slow bleed?
CFPs repeat over and over: make sure you’re using the correct accounts.
And to be fair to CFPs, they’re right.
The Three Accounts CFP Experts Recommend to Preserve Your Wealth
Let’s break down exact recommendations of accounts the experts recommend in CFP advice – the accounts that protect wealth and allow your money to actually do something useful.
1. High-Yield Savings Account (HYSA) – Your Cash Should Actually Earn
A HYSA is kind of like a savings account that has been to the gym. Instead of awarding another insulting 0.01% rates it offers you anywhere from 4% to 5% depending on the market.
Why HYSAs Are Important
If you are leaving your emergency savings in a basic account you are losing money.
Plain and simple.
Your cash in a HYSA at least keeps up with inflation – sometimes beats inflation.
Best Uses for a HYSA
You are keeping this account for:
- Emergency fund
- Short-term savings (vacations, big purchase, moving)
- Cash you need to access quickly.
This is NOT for long-term growth in wealth – but helps protect your savings from the evil grips of inflation.
Why I Love It (This is personal)
I once kept my savings in a bank until I discovered that I was earning less interest in a year than I spent on coffee in two days.
I moved to a high-yield savings account to actually earn some money with my savings instead of doing nothing.
Quick Takeaway
Your cash shouldn’t sit.
It should at least jog lightly, and a HYSA does exactly that.
2. Roth IRA — Future You Will Thank You (Probably Loudly)
If you ever want to retire without asking “WHY IS EVERYTHING SO EXPENSIVE?” every single day, you need a tax-advantaged account.
In comes: The Roth IRA
This thing will protect your money from taxes forever- and forever is a long time.
Why the Roth IRA is a Wealth Machine
- You deposit money that you already paid taxes on.
- Your investments grow tax-free.
- You withdraw everything tax-free again in retirement.
It’s as if the government said, “We’ll take our taxes now, but after this, we’ll leave you alone.”
Which is rare… and beautiful.
Best Uses for a Roth IRA
This account only excels when you use it for:
- Long-term investing
- Stock market growth
- Protecting your retirement money from future taxes
If you want to turn average savings into serious growth, a Roth IRA is exactly how you do that.
Why I Recommend it
I treat my Roth IRA as my long-term wealth engine.
Each year, I max it out and invest in index funds, as they grow the most reliably long-term.
And yes, I know people say, “Just save money- you’ll be fine.”
Sure- if fine means just beating inflation.
If you want to actually grow your money, your money has to…
Big Bold Truth
If your cash sits too long, inflation eats it.
If you invest it, time grows it.
3. Brokerage Account — The Freedom to Grow Fast
In comparison to a Roth IRA, a brokerage account does not require meeting any rules, face penalties, or adhere to age restrictions. A brokerage account is truly your “do what you want” financial playground.
In my opinion, once your emergency fund and retirement accounts are on solid ground, it is the most flexible opportunity to grow your savings.
Why Having A Brokerage Account Is Important
CFPs suggest this because it offers:
- Unlimited contributions
- Easy investing
- Access to stocks, ETFs, or index funds
- No withdrawal penalties
You can simply open the account and begin to grow your wealth as you want, whenever you want.
Best Uses for a Brokerage Account
- Medium term goals (5–10 years)
- Growing your wealth in excess of retirement
- Extra cash you do not want sitting idle
How I’m Using My Account
I plan to use mine for “the future me” investment ideas; things such as:
- Buying a home
- Building a large cash cushion
- Investing extra income
- Growing my wealth to an extraordinary amount before retirement age
This saved my financial life by getting me past the “too much cash risk” that was stealing my progress.
Why CFPs Say You Should Avoid Holding Too Much Cash
I can imagine what you’re thinking- it’s nice to have cash on hand, right?
That’s fair.
Everyone feels this way to a certain extent.
But here’s the bad part- cash actually loses buying power virtually every single year.
Here’s how too much cash is costing you:
- Inflation eats away at your cash reserves.
Inflation normally averages 2%-6% per year.
If your bank is paying you 0.01%, every month you don’t really have the same amount of money as the month before.
- You miss out on investment growth.
Historically, the stock market returns 7% – 10% in growth per year.
To put this in perspective, investments double in value every 7 – 10 years.
Your cash does not gain value over time.
- You incur opportunity cost.
Every dollar you let sit still is a dollar you could have put to work and grown through investing.
- You hinder your wealth creation.
Time plus investing is what builds wealth.
A low-interest checking account where cash is accumulating interest does not build wealth.
Holding on to too much cash essentially means that you are choosing to decline in your wealth creation pattern, but in slow motion.
And let me tell you this right now… nobody wants that.
How to Decide Where Your Money Should Go
Now you’re probably wondering “Okay, that makes sense — but how do I go about selecting which account?”
Here is the simple delineation every CFP utilizes.
Step 1: Emergency Fund → High Yield Savings Account (HYSA).
You keep three to six months of expenses in here.
This protects you against surprise while not dragging the money down slowly.
Step 2: Retirement Growth → Roth IRA.
You invest here in an effort to grow wealth in the long-term with tax-free growth.
This is where you build freedom in the future.
Step 3: Extra Savings → Brokerage Account.
This is for everything else, specifically for:
- growing your money
- beating inflation
- building long-term wealth
- medium-term goals
When your basic needs have been met, your brokerage account is your money playground— halfway between saving and serious growth.
Financial Planning Tips to Keep Your Money Safe and Growing
The top tips for financial planning are below to help you keep your cash from losing value.
- Automate everything
Automate transfers into:
- Your HYSA.
- Your Roth IRA.
- Your brokerage.
If you automate it, you actually do it.
- Keep only the money you need in checking
Don’t let your checking account become a hotel for cash. Kick that extra money out.
- Invest regularly
Time in the market beats timing the market. Every. Single. Time.
- Review your accounts every three months
This allows you to:
- Identify inflation risk.
- Redirect extra savings.
- Stay on track.
- Don’t make decisions based on emotion with your money
If you ever think “I’ll just save cash for now” remember this:
Cash is not growing — it is shrinking.
(This includes that “money that I will invest later.”)
So… Which Account Should You Start With?
To get started on your journey, simply do the following:
- Open a high-yield savings account (HYSA) for your emergency fund.
- Open a Roth IRA for your long-term growth.
- Use a regular brokerage account for any additional savings (and future wealth).
Once you take these three steps, your financial structure will be extraordinarily strong. You will be protecting your money, growing your wealth intelligently, and preventing losses of money you don’t even know is lost.
So just remember, once you earn interest or returns on any investment, watching your money increase in value is way better than… watching it sit there.
Final Thoughts: Protect Your Money While It’s Still Worth Something
You think your money is “safe,” but it’s at risk — silent, sneaky inflation risk.
I say this because I’ve been there. Carrying too much cash just made me poor slower than I otherwise would be.
But when I took the CFP investment advice seriously and properly utilized the 3 best accounts to keep your money, my world changed:
(1) my cash stops losing value.
(2) my savings started growing.
(3) and my long-term wealth, skyrocketed!
So now, if I hear somebody say, “I keep all my money in my checking account,” I politely smile and cry a little bit inside.
If you really want your money to work for you and not just let it sit, get a HYSA!
