As the economy has slowed during 2020, many lawyers and law firms have turned to near-term investments as a way to build additional cash. However, attorneys turning to the investment markets have been forced to cope with an extremely low interest rate environment for an extended period of time, which creates challenges for those who need to maintain a level of liquidity in their portfolios.
According to the Federal Deposit Insurance Corp. (FDIC), the average national savings deposit rate is 0.05%. At that rate, for every $1,000 you keep in a bank savings account, you will earn interest of 50 cents over the course of the year, leaving many in search of other investments to earn more than the average return from a savings account. Below are five alternative investment solutions for cash—each with their own pros and cons to review—that lawyers looking to invest may want to consider in this low interest rate environment.