Check out low-penalty CDs
Low-penalty certificates of deposit are nearly liquid money. But they also pay higher rates.
"In the past few years, some banks began offering CDs with no lockup time," says Carol Kaplan, spokeswoman for the American Bankers Association.
The pluses are significant. They include taking money at any time without a large penalty, earning higher interest than a savings account and having FDIC insurance.
For example, Ally Bank offers no-penalty, 11-month CDs paying 1.15 percent APY with no withdrawal penalties as of mid-March. There's also no minimum investment.
"These CDs are almost liquid," Tumin says. "Then, you also get the benefit of a rate lock."