The economy has always been unpredictable, capable of throwing curveballs without warning. For many self-employed professionals, life feels more precarious than usual right now. Tariff uncertainty, slower client pipelines, and shifting interest rates have pushed cash management back to the top of the priority list. Financial educator Suze Orman recently outlined the three best cash moves to consider during turbulent times, and at the center of all three sits one tool: the high yield savings account.
I have spent years writing about cash flow for freelancers, consultants, and one-person businesses. The advice that holds up across every cycle is the same. When your income is variable, your reserves matter more, not less. Suze Orman’s three-step framework lines up cleanly with how I coach self-employed clients to structure their cash.
Step one: build a high yield savings account emergency fund
Orman’s first move is to put your emergency savings in a high yield savings account. She recommends a substantial reserve to weather any pains a recession may bring. By using a high yield savings account, your money can generate interest while remaining fully liquid and protected.
For a self-employed person, the emergency fund target is usually higher than the standard three to six months. I generally recommend six to twelve months of personal expenses, plus a separate business reserve covering at least three months of overhead. The U.S. FDIC’s deposit insurance overview explains how that cash stays protected up to the standard limit at insured banks. The CFPB’s Your Money, Your Goals resources include free worksheets to size your reserve based on your real expenses.
Step two: layer in CDs for cash you do not need this month
Orman’s second suggestion is putting cash you do not need immediate access to in a certificate of deposit account. CDs offer higher yields because you commit your money to the bank or credit union for a set period, typically one to five years. You agree to pay a penalty if you need to withdraw the money early. Generally, the longer the term of the CD, the higher the annual percentage yield.
For self-employed people, CDs work best for known future expenses with predictable timing. Quarterly tax payments, an upcoming equipment purchase, or a planned tax-deferred retirement contribution are all good fits. Spreading your savings across a few CD accounts, known as CD laddering, can give you regular liquidity without sacrificing yield. The basic structure is simple: split the same dollar amount across CDs of different lengths so that one matures every few months.
Step three: add Treasuries for the safest layer
Finally, Orman recommends buying U.S. Treasuries, which can be done most efficiently via an account at a discount brokerage or directly through TreasuryDirect. You can also take a laddering approach with Treasuries.
For example, you could divide your safe money across a 1-year, 3-year, 5-year, and perhaps a 7-year Treasury. This way, you will have funds maturing at different times. Depending on your needs when a Treasury matures and the current state of interest rates, you can decide whether to reinvest in another Treasury and for what length of time, or consider other investment options.
Treasuries carry the backing of the U.S. government, which is why they sit at the safest end of the cash and near-cash spectrum. For self-employed people in higher state-tax jurisdictions, Treasury interest also carries a useful benefit: it is exempt from state and local income tax, which can quietly boost your effective yield.
How to combine the three for self-employed cash flow
Stacking the three tools is where the framework becomes powerful. Here is the simple structure I recommend most often:
- Operating buffer: One month of business expenses in a checking account.
- Emergency reserve: Six to twelve months of personal expenses in a high yield savings account.
- Tax reserve: Quarterly tax dollars in CDs maturing the week before each estimated tax deadline.
- Long-term safe layer: Treasuries laddered across one to seven years for money you will not need soon but want to keep ultra-safe.
That layout protects against three failure modes at once: an unexpected business slowdown, a missed quarterly tax payment, and a longer downturn that drags on your personal finances. Our self-employed bookkeeping guide covers how to track these reserves cleanly without juggling spreadsheets. For tax-side mechanics, our essential forms guide explains what you owe each quarter so the tax reserve does the job it is meant to do.
What to look for in a high yield savings account
Not every high yield savings account is created equal. As you compare options, focus on:
- Current annual percentage yield, and how often it has changed in the last year.
- FDIC or NCUA insurance up to standard limits, with no asterisks.
- Transfer speed to and from your business checking account.
- Any minimums, monthly fees, or withdrawal limits.
The headline rate matters less than the long-run consistency. A bank that offered the top rate for six months but cut it sharply in month seven may be a worse fit than a bank with a slightly lower but stable rate.
Cash strategies for self-employed people during uncertain times
By making these strategic moves, Orman believes individuals can better prepare to navigate potential financial turbulence. For self-employed people, the deeper benefit is psychological. A clearly structured cash plan removes the daily stress of wondering whether you will be ok if a client pulls back. That clarity is what lets you keep doing good work when the macro picture gets noisy.
If you are still building the income that funds these reserves, our self-employment ideas guide covers a wide range of starting points, from low-startup-cost services to scalable digital products.
Frequently asked questions
What is a high yield savings account?
A high yield savings account is a federally insured savings account that pays significantly higher interest than a standard savings account. It typically lives at an online bank with low overhead, and your cash remains fully liquid.
How much should a self-employed person keep in a high yield savings account?
Most self-employed people benefit from six to twelve months of personal expenses in a high yield savings account, plus a separate business reserve covering at least three months of overhead. Adjust based on the stability of your client base.
Are CDs better than a high yield savings account?
CDs usually pay slightly more but lock up your money for a set period. A high yield savings account is more flexible. Most self-employed people benefit from using both, with the savings account for true emergencies and CDs for known future expenses.
Why do Treasuries get special tax treatment?
Interest from U.S. Treasuries is exempt from state and local income taxes. That can meaningfully boost the after-tax yield for self-employed people in higher tax states.
Are these accounts safe in a recession?
A high yield savings account at an FDIC-insured bank is protected up to the standard limit per depositor per bank. Treasuries are backed by the U.S. government. Both are designed to be safe in a downturn, which is why they sit at the core of Suze Orman’s framework.
How do I know if my high yield savings account is FDIC insured?
Look for the FDIC logo on the bank’s website and verify the bank in the FDIC’s BankFind tool. Credit unions use the equivalent NCUA insurance. If you cannot find clear evidence of insurance, choose a different institution.
Photo by Karolina Grabowska on Pexels
