The 4 Smartest Places to Put Your Money in October 2023

Many Americans live paycheck to paycheck with no spare money to do anything with. If your personal finances are in the opposite boat, it's important to find the right home for the money you don't need for bills and expenses. This month, it pays to explore these options.

1. A savings account

Wouldn't it be great to earn a solid return on your money without taking on any risk? If you put your spare cash in a savings account, you can do just that.

Savings account rates are up right now, following a string of Federal Reserve interest rate hikes. You might snag an APY of 4% to almost 5% without having to restrict your money in any way. All you need to do is choose a bank that's FDIC-insured so your deposits are protected for up to $250,000. And if you're not sure whether your bank falls into that category, check the FDIC's BankFind Suite tool.

2. A CD

CD rates are up right now for the same reason as savings accounts. Only with a CD, you're guaranteed the same interest rate throughout a specific period of time, whereas your interest rate on a savings account can fluctuate as time goes on.

You should know that with a CD, you'll need to commit to keeping your money in the bank for a preset period of time -- whatever term CD you sign up for. If you cash out a CD early, you can expect to face a penalty, so you'll want to make sure you won't need to use your money for the time period you're looking at. For example, if you're interested in a 12-month CD, make certain the money you're putting in isn't cash you expect to use or need for the next year.

3. An IRA

Savings accounts and CDs are great places to keep your money this month. But if you want to focus on a longer-term goal like retirement, then an individual retirement account (IRA) is a better bet. With an IRA, you can invest your money and, ideally, grow it into a larger sum.

Plus, traditional IRAs give you an upfront tax break on your contributions, which is something you won't get with a savings account or CD. In fact, the interest you earn on one of those accounts will count as taxable income, whereas gains in an IRA are tax-deferred so you're not being taxed right away.

This year, you can contribute up to $6,500 to an IRA if you're under the age of 50, or up to $7,500 if you're 50 or older. But remember, any amount of money you put into a traditional IRA will shield some income from taxes.

4. A 401(k)

Not everyone has access to a 401(k) plan for retirement savings purposes. But if you do, it could pay to put your money into one of these accounts over an IRA for one big reason: a potential employer match.

Many companies that sponsor 401(k)s also match worker contributions to a certain degree. That's free money for your retirement. And like a traditional IRA, traditional 401(k) contributions will make it so that the IRS can't tax you on a portion of your money.

An IRA is something you can open at pretty much any brokerage firm. But to sign up for a 401(k) through your job, you'll need to speak to your benefits coordinator or payroll department to find out what to do. You should also know that the clock is ticking down to contribute to a 401(k) for 2023, so if that's something you're interested in, it's best to act quickly.

This month, you have a prime opportunity to put your money to work. Consider one of these accounts, or a combination of them. You could, for example, put a little money into a CD for the higher interest rate, stash some cash in a regular savings account, and make a modest IRA contribution so you're able to snag a tax break, too.