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The Best Short-, Mid- and Long-Term Savings Options for Down Payments

Caroline Connolly
Caroline Connolly Relationship Manager 3 min read
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If you’re in the market to purchase a home, you already know that saving enough money for your down payment is often a marathon, not a sprint. Luckily, there are what we believe are plenty of financial strategies that can help you reach your goal more quickly, and using your buying timeline to gauge the best way to save is one of them.

Whether you plan to purchase your home in the short, medium or long term, here are what we believe are the best savings vehicles to help you across the finish line.

Timeline: Short Term

Years to save: One year or less

Best ways to save: If you have a limited time frame to work with, two good savings options to consider include:

  • A traditional savings account: When you are close to your goal of buying a home, keeping your assets safe and accessible is the most important factor. Though savings accounts may have lower interest rates compared to some other alternatives, they provide you with easy access to cash and are insured by the FDIC up to the applicable limits, making them a safe place to store your down payment.
  • A money market account: Money market accounts often offer benefits traditional savings accounts do not. With a money market account, you often have check-writing privileges and access to an ATM card. One feature they share with savings accounts is the ability to send and receive funds to other financial accounts. Additionally, like savings accounts, money market accounts are FDIC insured up to the applicable limits so you can rest easy knowing your savings are protected.

Keep in mind: Both these types of accounts often have minimum deposits and balances and could incur account service fees.

Timeline: Medium Term

Years to save: One to two years

Best ways to save: With more than a year to buy your house, you might want to consider the following savings option for your money:

  • Certificates of Deposit: Certificates of Deposit (or CDs), may be a great way to use your idle assets for financial goals you’re looking to achieve within a year or two. Among bank deposits, CDs typically offer higher-than-average rates fixed for the term of the CD of your choice. Before considering a CD, make sure you won’t need to access the assets prior to the end of the term since there are usually penalties for taking the money out sooner.

Keep in mind: There are often minimum amounts to open these accounts, especially for higher-yield options.

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Timeline: Long Term

Years to save: Two or more

Best ways to save: While it’s true that the products listed above should net you guaranteed returns without risking the principal of your bank deposit, if you have more time you may want to utilize investment products that may provide a higher return potential from the market.

  • An automated investment platform: With a little extra time, the money you’re saving for a down payment has the potential to earn a solid rate of return — as long as you invest wisely. First Republic’s Eagle Invest,1 for example, provides clients with an automated investment platform that utilizes powerful trading algorithms to dynamically manage funds based on personal goals, risk tolerance and time horizon, while simultaneously providing access to real-life advisors for help when necessary.

Keep in mind: This type of account is at the mercy of the markets, so while a solid rate of return is possible based on your time frame of two or more years, you shouldn’t expect any investment platform to provide guaranteed returns, as investment products and services:

  • Are not FDIC insured
  • Are not deposits or other obligations of, or guaranteed by the Bank or by any Federal Government Agency.
  • May lose value.

Saving for your down payment is a personal journey that will ultimately come down to a number of different financial factors. Using your time frame to gauge the best financial products for your ultimate goal is one of the best ways to ensure you make the most out of potential savings and investment opportunities along the way. 

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1 Minimum account balance is $5,000. Eagle Invest is an investment advisory service offered by First Republic Investment Management, Inc., in partnership with FutureAdvisor, Inc. (FutureAdvisor). First Republic Investment Management, FutureAdvisor and Fidelity Investments, Member FINRA/SIPC, are unaffiliated SEC-registered investment advisors. FutureAdvisor is a registered trademark of BlackRock, Inc., or its subsidiaries in the United States and elsewhere.

Eagle Invest utilizes automated algorithms for investment advice based on information provided by the client online through the Eagle Invest website. FRIM customizes portfolios to the specific needs of the client based on an on-going dialog with the client. FRIM may also adjust portfolios tactically based on current market conditions. Asset allocation and diversification do not guarantee profit or protect against loss.

The strategies mentioned in this article may have tax and legal consequences; therefore, you should consult your own attorneys and/or tax advisors to understand the tax and legal consequences of any strategies mentioned in this document. First Republic does not provide tax or legal advice. We make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained here. This information is governed by our Terms and Conditions of Use.


If you’re ready to learn more about purchasing your new (or next) home, we’re ready to help you explore what’s possible.


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© 2021 First Republic Bank.

Banking products and services are offered by First Republic Bank, Member FDIC and Equal Housing Lender

Investment Advisory services are provided by First Republic Investment Management, Inc. Trust and Fiduciary Services are offered through First Republic Trust Company, a division of First Republic Bank; and First Republic Trust Company of Delaware LLC and First Republic Trust Company of Wyoming LLC, both wholly owned subsidiaries of First Republic Bank. Brokerage services are offered through First Republic Securities Company, LLC, Member FINRA / SIPC. Insurance services are provided through First Republic Securities Company, DBA Grand Eagle Insurance Services, LLC, CA Insurance License # 0I13184, and First Republic Investment Management, DBA Eagle Private Insurance Services, CA Insurance License # 0K93728.

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