Money Foundations · 8 min read
Where Cash Should Live
Checking, savings, high-yield, money market, CDs, T-bills — five parking spots, wildly different yields, same insurance. Most physicians use the worst one.
The $60,000 sitting in checking
A typical attending household lets $40,000–80,000 accumulate in a checking account paying essentially nothing. Nobody decided that — it just piled up between residency and the first busy years. At a big-bank rate of 0.05 percent, $60,000 earns about $30 a year. In a high-yield savings account paying around 4 percent, the same dollars earn about $2,400. Same money, same FDIC insurance, same one-week effort to move it. This module is the ten-minute version of what the money already sitting in your accounts should be doing.
High-yield savings account (HYSA)
A savings account — usually at an online bank — paying an interest rate near the Federal Reserve’s short-term rate, instead of the near-zero rate at branch banks. Same FDIC insurance, same liquidity; the difference is overhead and whether the bank is counting on your inertia.
Start with the single highest-yield-per-minute move in personal finance.
Why it matters: The gap between a big-bank savings rate (~0.5 percent) and a competitive HYSA (~4 percent in 2026 — it moves with the Fed) is not a rounding error. On a physician-sized emergency fund it is one to two thousand dollars a year, every year, for one afternoon of setup.
The five parking spots
Tap each card. Every dollar of cash you hold lives in one of these — each trades yield against access.
Checking
For money in motion — one to two months of outflows. Pays ~0 percent by design. Anything beyond the monthly buffer parked here is a silent donation to the bank.
High-yield savings
The emergency-fund home. FDIC-insured, next-day access, market-rate interest (~4 percent in 2026, floats with the Fed). The default answer to “where should my cash be?”
Money market — fund vs account
Two different things with one name. A money market ACCOUNT is a bank product with FDIC insurance. A money market FUND is a brokerage investment holding T-bills — not FDIC-insured (SIPC covers broker failure, not the investment). Yields are similar; know which one you own.
Certificates of deposit (CDs)
You lock money for a term (3 months–5 years) for a fixed rate, FDIC-insured. Early withdrawal costs months of interest. Useful when you want to lock today’s rate for a known future expense — not for the emergency fund.
Treasury bills
Short-term loans to the U.S. government, backed by its full faith and credit. Interest is exempt from STATE income tax — a real edge for physicians in California, New York, or New Jersey. Bought at a brokerage or TreasuryDirect.
$250,000 per depositor, per insured bank, per ownership category
Deposit insurance is the reason a bank account is different in kind from an investment. If the bank fails, you are made whole — automatically, usually within days.
Source: FDIC (NCUA provides the same coverage at credit unions)
The name collision that catches everyone
This step is a quick self-check. Open the full module to try it with your numbers →
The cost of parking in the wrong spot
A $45,000 emergency fund, held for one year.
Bottom line: About $1,800 a year for changing where the same dollars sleep — with identical insurance and identical access. There is no other hour in finance that pays a physician this well.
The $80,000 checking account
This step is an interactive scenario. Open the full module to try it with your numbers →
The parking spots, side by side
Rates are illustrative 2026 figures — the relationships between rows are the durable part.
| Vehicle | Yield (2026, approx.) | Access | Insurance | |
|---|---|---|---|---|
| Checking | Checking | ~0% | Instant | FDIC |
| Big-bank savings | Big-bank savings | ~0.5% | Instant | FDIC |
| High-yield savings | High-yield savings | ~4% | 1 day | FDIC |
| Money market fund | Money market fund | ~4% | 1–2 days | SIPC only |
| 12-month CD | 12-month CD | ~4% locked | Locked (penalty) | FDIC |
| Treasury bills | Treasury bills | ~4%, state-tax-free | At maturity / sale | U.S. Treasury |
What to do this week
- Checking holds one to two months of outflows — no more. It pays nothing by design.
- The emergency fund — 3 to 6 months of essential expenses — belongs in a high-yield savings account with FDIC insurance.
- Money market fund ≠ money market account. The fund is an investment (no FDIC); the account is a deposit.
- CDs and T-bills lock a rate for a known date; T-bill interest skips state income tax — real money in high-tax states.
- FDIC covers $250,000 per depositor, per bank, per ownership category. A physician couple can structure well past $500,000 of coverage at one bank.
Do this next: Open your banking app and find the actual APY on your savings account. If it starts with a zero, open a high-yield savings account this week and move everything beyond your checking buffer.
Run this with your own numbers
The interactive version of this lesson works through your actual paycheck, loans, and benchmarks — and your AI advisor can take it from there. Free to start, no card required.
Keep reading
Inflation: The Silent Pay Cut
Three percent a year sounds harmless. Over a physician career it cuts every unprotected dollar roughly in half — twice.
Net Worth: Understanding Your Number
Most physicians in their thirties have a negative net worth. This is normal. Not knowing it — and not tracking it — is the problem.