Your main concern is the safety of your money. This savings isn't supposed to make money for you, that's what the business is for.
You can put it into a savings account or CDs at an FDIC/NCUA-insured bank or credit union, and that'd work just fine, but make sure that you stay UNDER the insurance limit (currently $250k), otherwise if the bank goes, so does the portion of the deposit beyond the limit.
If you're feeling curious about other options, a money market account[1] would work too, as would short-term treasuries via TreasuryDirect. But it's likely the case that neither of those will be better than a plain old bank account.
As an aside, there are some states which allow banks to buy private deposit insurance (eg ASI), but I don't trust that system; it's already failed many times in the past[2]. Basically, if they don't have a FDIC or NCUA logo at the bottom of their page, skip it. However, I've only seen one place that actually used that crap (SF Fire CU).
[1] I'm referring to actual money market mutual funds (which are NOT insured like a bank deposit, but are regardless considered 'safe money'). Some banks offer "money market" accounts, but they're identical to the normal insured savings accounts with a different label slapped on the front.
Oh, forgot to mention: Savings accounts have a 6 transaction per month maximum (as mandated by the Fed). If you exceed that, you'll be paying fees. So if you're going to be doing a lot of frequent deposits/withdrawals, you'd want to use a checking account.
You can put it into a savings account or CDs at an FDIC/NCUA-insured bank or credit union, and that'd work just fine, but make sure that you stay UNDER the insurance limit (currently $250k), otherwise if the bank goes, so does the portion of the deposit beyond the limit.
If you're feeling curious about other options, a money market account[1] would work too, as would short-term treasuries via TreasuryDirect. But it's likely the case that neither of those will be better than a plain old bank account.
As an aside, there are some states which allow banks to buy private deposit insurance (eg ASI), but I don't trust that system; it's already failed many times in the past[2]. Basically, if they don't have a FDIC or NCUA logo at the bottom of their page, skip it. However, I've only seen one place that actually used that crap (SF Fire CU).
[1] I'm referring to actual money market mutual funds (which are NOT insured like a bank deposit, but are regardless considered 'safe money'). Some banks offer "money market" accounts, but they're identical to the normal insured savings accounts with a different label slapped on the front.
[2] https://www.clevelandfed.org/Research/commentary/1994/0501.p... "Lessons from the Collapse of Three State-Chartered Private Deposit Insurance Funds"
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This is probably more info than you really need, so here's the tl;dr version: Yeah, a savings account is fine. Just keep the balance under $250k.