A lot depends on how much time you have to work on the savings. There are a lot of bank deals out there where you can earn more than 6% which is safe and some limited specials as high as 10%, but it will take time applying and keeping track of them. Go to http://bankdeals.blogspot.com for a huge number of these.

3% is too low to be earning. You want to move that into a higher interest paying account.

I would recommend putting it into an Index fund. It isn’t sexy, but it isn’t risky either. My preference is for companies like Vanguard and Fidelity.
http://www.vanguard.com
http://www.fidelity.com

I have accounts and funds in both companies. I agree with Pam 3% is like putting your money under your mattress. You want it to work harder for you than that! Good luck.

While index funds are good long term investments, they certainly are not safe - they can be quite risky over the short term (all they are is a bunch of stocks). There is no guarantee that you will not lose money with them so for what you have been asking for, they are not what is in your best interest.

i agree with pam and janice.

3% is minimal, gather everything you want to keep liquid up into the highest % savings account possible.

everything else should go into a save investment, given the age, something like an index fund.

only venture out into more risky things if you really do your homework, because risk is not something that should be taken on when you’re not that terribly far from retirement.

If you want the lowest risk possible, look into government bonds. (I’m assuming you are American.) Buy them direct from Treasury Direct (http://www.savingsbonds.gov/) so you don’t have to pay any fees. Do not sell them; just keep them until they mature. If they don’t explain the process quite well enough for you, do some googling.

Make sure these expire at different times so that you can have some money available at any time.

Also remember that you cannot avoid risk. You say you are afraid because you are in your late fifties. How is your health? If it is good, you are at much greater risk of outliving your money if you don’t have some in the stock market than you are of losing money if you do. If your “other money in funds and IRAs” is in stocks or other higher-risk higher-returns sectors, you may be covered.

Let me get more specific. If you are 58, and you live to be 78, you won’t be needing some of your money for 20 or more years. That money is less risky in the stock market than in something “safe.”

When I get close to retirement, I plant to have 10-15% of my money in the kinds of low-risk things you’re asking about (more if interest rates are high, less if low–I’d have about 12% if I were retiring today). I’d have all the rest in other stuff, mostly US and foreign stock index funds, some in REITs (now’s not the best time to get into those, though, since there’s a housing bubble). I’d mostly live by selling 4% of my stock each year. If that was more money than I needed, I’d put the rest into safe stuff. If it wasn’t enough, I’d sell some of my safe stuff. If stocks were plummenting, I would get more from my safe stuff unless it was down to 10% of my total.

I have a retirement bias though. What are those funds for? Emergencies like having to buy a new car or lend money to a relative? Then the bond ladder will probably work well for you. The more short term the goal, the more appropriate bonds are than stocks.

Best of luck.

I agree, a mix of high interest savings, CD’s, t-bills, and conservative mutuals like bond funds.

I was in the same situation a month ago and put most of it in mutual funds in emerging markets. So far it is up about 6% in a month.

I’m not sure why people are recommending stocks and emerging markets when the person clearly says she doesn’t want to take any risks. Great that you have earned some money, but emerging markets are definitely a high risk proposition and not at all what this person was asking for. And while index funds are less risky than individual stocks, they still carry a lot of risk, especially short term.