Fortunately, you can stash savings in a number of safe financial instruments that also reward your efforts with a little free money in the form of interest.
While they aren't going to set the world on fire with sky-high returns, the following investments each provide a safe place to park your savings:
1. Checking accounts
What they are: Interest-bearing checking accounts allow account holders to access funds with checks and debit cards while still earning interest on their money.
Risk: These accounts are insured for up to $250,000 by the Federal Deposit Insurance Corp. or the National Credit Union Administration (for credit unions) through Dec. 31, 2013. On Jan. 1, 2014, the standard insurance amount is scheduled to return to $100,000.
Liquidity: Interest checking accounts are extremely liquid. Most come with the ability to write checks, transfer cash and make debit purchases. For many accounts, however, account holders are assessed a fee if the balance drops below a certain minimum.
Pros and cons: Interest-bearing checking provides the opportunity to earn interest with high liquidity and low risk. However, most interest checking accounts charge higher fees than their "free checking" counterparts. In many accounts, these fees can be waived if the accountholder meets certain conditions -- for example, keeping a minimum balance or making at least five debit card transactions in a month.
