tl;dr: Down payment money has one job: be there, in full, on closing day. Keep it out of stocks. If you are buying within three years, use a high-yield cash account, Treasury bills or a CD that matures before you need it. Among the brokerages we review, cash rates run from 0.50% to 3.75%, depending on the account and whether you pay for a subscription. Last verified November 14, 2026. See how we review.
Where to keep a down payment: safe places that still pay
Deciding whether to buy at all? Start with our rent vs buy breakdown. If you are saving for a house, this guide covers where that money should sit while you wait.
In this guide
Three Rules for Down Payment Money
A down payment is not an investment. It is a bill with a due date, and the rules follow from that.
Safety first. A 20% drop in the stock market a month before closing can cost you the house. Money you need within three years does not belong in stocks, crypto or long-term bond funds.
Access second. You need to move the money within days once an offer is accepted. Earnest money is often due soon after signing, and lenders want to see the funds in your account, usually across two months of statements.
Yield third. Once the money is safe and reachable, get paid for it. The gap between a 0.4% savings account and a 3.5% cash account is about $1,550 a year on $50,000. See how it compounds with our compound interest calculator.
Match the account to your timeline
When you plan to buy | Where the money fits |
|---|---|
Under 6 months | A high-yield cash or savings account only |
6 to 18 months | A high-yield cash account, or Treasury bills and CDs that mature before you buy |
18 months to 3 years | A ladder of Treasury bills or CDs, with a cash account for the rest |
More than 3 years | A mix can make sense, but keep the core in cash and Treasuries |
What Brokerages Pay on Cash
Every figure below comes from the companies' own pages, checked for our reviews. Rates are variable and can change at any time.
Brokerage | Cash rate | What it costs | Rate as of |
|---|---|---|---|
3.30% APY; 3.75% with Public Reserve | Free; Reserve is $20 a month | Nov 2026 | |
3.60% APY with Gold | Gold is $5 a month | Sep 17, 2026 | |
3.6% with Premium; 0.50% without | Premium is $3.99 a month or $40 a year | Nov 2026 | |
3.35% APY on $100 or more | $3 a month if you hold under $10,000 at M1 | Nov 2026 | |
SPAXX money market fund, 3.56% 7-day yield; FCASH 1.94% | Free | Oct 31, 2026 (SPAXX) |
Cash at these brokerages is swept to partner banks with FDIC insurance. Public lists coverage up to $5 million and M1 up to $4.75 million. Fidelity's SPAXX is a money market fund, which is not FDIC insured.
Do the subscription math
A higher rate only helps if it beats the fee.
Public Reserve: the extra 0.45% costs $240 a year, so it pays for itself above roughly $53,000 in cash.
Webull Premium: the jump from 0.50% to 3.6% covers the $40 yearly fee at about $1,300 in cash.
M1: on $5,000, the $36 yearly platform fee cuts 3.35% to about 2.6%. At $10,000 or more the fee goes away.
Public's free tier needs no math: 3.30% with no fee and no minimum.
Compare all of them in our brokerage reviews.
Other Safe Places
High-yield savings accounts. The simplest choice. FDIC insurance covers $250,000 per depositor, per bank, per ownership category, so a couple with a joint account is covered to $500,000 at one bank.
Treasury bills. Backed by the US government and sold in terms from four weeks to one year. The interest is exempt from state and local income tax. You can buy them at most brokerages or at TreasuryDirect. If you sell before maturity, the price can be slightly above or below what you paid.
Certificates of deposit. A fixed rate for a fixed term. Use them only when the term ends before you need the money, since early withdrawal usually costs several months of interest.
Money market funds. Available at Fidelity and most large brokerages. They are not FDIC insured, though losses have been very rare.
Where Not to Keep It
Stocks and stock funds. Fine for retirement, wrong for a bill due in two years.
Crypto. Too volatile for money with a deadline.
Long-term bond funds. They lose value when rates rise.
I bonds. You cannot cash them at all in the first 12 months.
A checking account paying nothing. Safe, but it gives up hundreds or thousands of dollars a year.
Lowcountry Ledger's Take: For most buyers the answer is boring, and that is the point. Put the down payment in a free high-yield cash account and stop thinking about it. If you are a year or more out, add Treasury bills that mature before you start house hunting. Pay for a subscription only when the math clears.
Down Payment FAQ
1. Should I invest my down payment in the stock market?
Not if you are buying within three years. The upside is a slightly bigger down payment. The downside is not being able to buy.
2. Is a brokerage cash account as safe as a bank?
Cash sweep programs place your money at partner banks with FDIC insurance, often well above the standard $250,000. The brokerage itself is not a bank, so check which coverage applies before moving a large sum.
3. Will moving money around hurt my mortgage application?
Lenders review recent statements and ask about large deposits. Pick an account early and leave the money there for the two to three months before you apply.
4. How much do I need?
Run your numbers in our mortgage calculator, then add closing costs and moving money on top.
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