The safest places for cash
Short-term-bond funds have higher returns than money markets, but they're riskier.
NEW YORK (Money Magazine) -- Q. I'm going to receive a large sum of cash from a severance agreement. Since I expect to be working again soon, I'd like to use the money as a cushion in case of future job loss. Where's the best place to put it? -- Chris Kratsch, Montgomery, Ill.
Joe Light, staff writer, says:
A. An FDIC-insured savings account or a money-market account is the best place for savings that you need to keep ultrasafe and readily available.
Normally about six months' worth of living expenses is enough to keep on hand, but given the current pace of layoffs, you may want to keep enough to last you for a year.
To boost your yield, you may want to keep the excess of the six months' supply in a short-term-bond index fund. While these funds occasionally lose money, the risk of big losses is low, and the returns are significantly higher than you'll find on money-market accounts.
Got a financial dilemma? Go to cnnmoney.com/helpdesk to submit questions, read the Help Desk archive, and check out Help Desk videos. And tune in to CNN's Newsroom Tuesdays and Fridays, when Gerri Willis and other experts answer your questions. 
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