sugar_in_your_tea , 7 months ago (edited 7 months ago)

The best options are Treasuries or CDs since they lock in rates for the term of the bond/CD. You should be able to do a little better than 5% though, I see brokered CDs at 5-5.5%, and t-bills are ~5.4% for 1-year.

If your state taxes are high, consider t-bills since they avoid state taxes. Check out this site to directly compare fixed income rates based on your tax rate.

RE risk tolerance, you really shouldn’t be doing anything risky with a timeline of 2 years. The potential gains will be absolutely dwarfed by your contributions, and any losses will delay your purchase date, especially if they happen at the end of the 2 years. 5-6% is pretty much the limit these days for risk free or low risk returns, so pick something and get to saving.