I Sold My Home Before Buying a New One. Here’s What I Did With the Profits

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I sold my home and I’m waiting to find a new property to purchase. Read on to learn where I put the money to keep it secure and accessible. 

I sold my home a few months ago.

I’m planning to get a mortgage and buy a new one soon, but I have not yet been able to find a property that I want to buy. As a result, I have a substantial amount of money from the proceeds of the sale of my house that I needed to find a safe place for until I’m ready to put the money down on my new place.

Here’s what I decided to do with all that money.

This is where my home sale proceeds are now

Once I had received the money from the sale of my home, I decided that I was going to put the money into a high-yield savings account.

Because I didn’t have a mortgage on this house, the proceeds from the sale were above the $250,000 limit for FDIC insurance. FDIC insurance protects my deposits in case of a bank failure, but it only covers $250,000 per person per account.

I didn’t have a joint savings account with my husband at the time that I could put all of this money into without exceeding the insured limits. So I split the money into several different savings accounts in each of our names so that the money in each account would be below the $250,000 cap and would be fully insured.

I made this decision because protecting the money was, and is, my number one priority. I will need the funds soon to make a down payment to buy my new place and I can’t afford to lose any of it or have it tied up.

Since I need the funds accessible, I didn’t want to invest the money in the stock market where I’d be at risk of losing it or having to sell at a bad time. And I didn’t want to buy a CD because I might need to withdraw the funds before the CD term ends if the right house comes along — and I don’t want to pay a penalty if that happens.

While I could have earned better returns by investing or buying a CD, my goal isn’t to make money with my home down payment. It’s to keep it accessible and ready to go when the perfect property finally shows up. A high-yield savings account is perfect because I do earn a little bit of interest (which adds up on a large balance) but I’m taking no risk and can access the money as soon as I need it.

Be sure to keep money safe if you’ll need it in the short term

Whether you have money from the proceeds of a home sale that you’re hanging onto for a short time, or you have funds for some other reason that you’ll need soon, it’s important to make a smart decision about the best place for that cash.

While trying to maximize your returns may seem tempting, especially if it’s a large sum of money, keeping the cash safe and accessible is a better bet when your timeline is short and losses would have dire consequences. For me, a savings account was the best idea, and it’s likely the right place for anyone else to put money if their situation is similar to mine as well.

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