Safe money usually means dollars that should not swing with the stock market: cash for the next few years of spending, a cushion for a shutdown or a delayed annuity payment, or the portion of a portfolio that lets the rest take more risk. Federal employees and retirees have four main places to put it: the Government Securities Investment Fund (G Fund) inside the Thrift Savings Plan (TSP), Treasury bills, Series I savings bonds (I bonds), and bank or credit union certificates of deposit (CDs).
Each one trades rate, access, and risk differently. This guide compares them using official figures from early November 2026 and shows where each fits. Rates change often, so the sources at the end are the places to check before moving any money.
What “safe” does and does not cover
In this context, safe means the principal is not exposed to market price swings, or that it is backed by the federal government or by federal deposit insurance. It does not mean immune from inflation. A yield that trails inflation still loses buying power over time.
Two things separate these options more than the headline rate: price risk, meaning what the holding is worth if it must be sold early, and access, meaning how quickly the money can be moved without a penalty or a lockup.
The four options side by side
| Option | Recent rate | Price risk | Access | Limits | Tax treatment |
|---|---|---|---|---|---|
| G Fund | 4.875% for September 2026 (reset monthly) | None; share value does not fluctuate | Any business day, under TSP withdrawal rules | Available only inside the TSP | Follows the TSP account type; traditional balances are taxed when withdrawn |
| Treasury bills | 4.21% (3-month) and 4.40% (1-year) on Nov. 3, 2026 | Minimal if sold before maturity; none if held | At maturity, or sold early through a broker | No purchase cap | Federal tax; exempt from state and local income tax |
| I bonds | 5.51% for six months on bonds issued November 2026 through April 2027 | None; value does not fall | Locked for 12 months; three months of interest forfeited if cashed before five years | $10,000 per person per year, electronically | Federal tax deferred until redemption; exempt from state and local income tax |
| CDs | FDIC national average of 1.71% for 12 months; competitive offers run higher | None while within insurance limits | Early withdrawal penalty | Insured to $250,000 per depositor, per bank, per ownership category | Interest taxed as ordinary income each year |
The G Fund: a long-term rate without price swings
The Treasury sets the G Fund interest rate each month. By statute (5 U.S.C. 8438), the rate equals the average market yield on outstanding marketable Treasury securities with four or more years to maturity. The TSP states that the value of G Fund securities does not fluctuate; only the interest rate changes.
That combination is hard to find outside the TSP. An individual who buys a 5-year or 10-year Treasury note earns a similar kind of rate but takes on price risk, because the note’s market value falls when yields rise. The G Fund pays a rate tied to those longer yields while the share value stays put.
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The monthly rate for September 2026 was 4.875%. Because the rate resets once a month, it follows market yields with a delay of up to a month, so the most recent posted rate is the one that counts. Monthly fund results appear on the TSP returns page.
The limits are worth knowing. The TSP itself warns that the G Fund may not grow enough to offset inflation and can trail the stock funds in strong markets. It also exists only inside the TSP, so it cannot serve as a place to park cash held in a bank or brokerage account.
Treasury bills and the case for staying short
Treasury bills mature in as little as four weeks and as long as 52 weeks. On Nov. 3, 2026, the Treasury’s daily par yield curve showed 4.03% for 1 month, 4.21% for 3 months, 4.26% for 6 months, and 4.40% for 1 year. Interest on Treasury securities is exempt from state and local income tax, which matters most for retirees in states that tax income. Bills can be bought through TreasuryDirect or a brokerage account.
Longer maturities pay more. The same curve showed 4.74% for 5 years, 4.95% for 10 years, and 5.35% for 20 years. The extra yield comes with price risk. A rough duration calculation for a 20-year bond yielding about 5.35% gives a duration near 12 years, which means a one-percentage-point rise in yields would cut the bond’s price by about 12%, and a one-point drop would lift it by about the same amount.
Holding a bond to maturity returns its face value, but the money is committed for the whole term, and inflation can erode what the interest buys. That price swing is the main difference between buying individual long bonds and holding the G Fund.
I bonds after the November reset
Series I savings bonds pay a composite rate built from two parts: a fixed rate that stays with the bond for its life of up to 30 years, and an inflation rate that resets every six months. TreasuryDirect publishes new rates each May and November.
For bonds issued November 2026 through April 2027, the reported fixed rate is 1.40% and the composite rate is 5.51%. Bonds issued May through October 2026 carried a 0.90% fixed rate and a 4.26% composite rate, and bonds issued November 2025 through April 2026 carried 4.03%.
The fixed rate is the lasting part of the return. Older bonds with a 0% fixed rate earn only the inflation component, reported at 4.08% annualized for the next six months. Several rules apply to every I bond: nothing can be cashed in during the first 12 months, cashing in before five years forfeits the last three months of interest, and electronic purchases are capped at $10,000 per person per year.
Interest is subject to federal income tax but can be deferred until redemption, and it is exempt from state and local income tax. A holder weighing whether to redeem a 0%-fixed bond and buy one with a 1.40% fixed rate would owe federal tax on the accumulated interest at redemption and would be limited by the annual cap, so the math depends on the individual situation.
CDs and the insurance limit
A CD pays a fixed rate for a set term, and cashing out early usually costs interest. The Federal Deposit Insurance Corporation (FDIC) publishes national rates each month. Those figures showed an average of 0.38% on savings accounts in July 2026 and 1.71% on 12-month CDs in August 2026.
These are averages across all institutions and are pulled down by the largest banks, so they do not describe what the most competitive banks and credit unions pay. Comparing current offers matters more than any national benchmark.
Deposit insurance covers up to $250,000 per depositor, per insured bank, per ownership category. The National Credit Union Administration (NCUA) provides the same standard amount at federally insured credit unions. The FDIC’s Electronic Deposit Insurance Estimator shows how much of a given balance is covered.
What $100,000 earns in a year under each rate
The table below is simple arithmetic at the rates cited above, before taxes. It is an illustration, not a forecast, because the G Fund and I bond rates reset during the year.
| Option | Rate used | Interest on $100,000 over one year |
|---|---|---|
| 1-year Treasury | 4.40% | $4,400 |
| G Fund | 4.875% (September 2026 rate) | $4,875 |
| 12-month CD at the FDIC national average | 1.71% | $1,710 |
| Savings account at the FDIC national average | 0.38% | $380 |
| I bonds (capped at $10,000 per person per year) | 5.51% for the first six months | $275.50 on $10,000 for six months; the rate then resets |
The gap between the national averages and the Treasury and G Fund rates is the reason comparison shopping matters for cash held at a bank.
Questions that decide where safe money goes
- When is the money needed? Money for the coming year puts access first, which favors bills, short CDs, or the G Fund. I bonds lock up for at least 12 months.
- How much of the TSP is already in the G Fund? Safe money outside the TSP adds variety in access and tax treatment. The TSP calculators page collects tools for checking an allocation.
- What is the tax situation? State tax exemption on Treasury interest matters more in states with an income tax. Traditional TSP withdrawals are taxed as ordinary income no matter which fund produced the earnings.
- Do the amounts hit a cap? I bonds stop at $10,000 per person per year, and deposit insurance stops at $250,000 per ownership category per bank.
- What if inflation rises? Bills and the G Fund reset as yields move, I bonds adjust every six months, and a fixed-rate CD stays where it was set.
None of these options is the right answer for every reader. The goal is to match each dollar to the date it will be needed, and to know what each choice gives up.