Saving for a home down payment can feel challenging, given current real estate prices. Using the right assets can help give your balance a lift.

When you actually need the money is the “biggest driving factor,” said Ryan Dennehy, principal and financial advisor at California Financial Advisors in San Ramon, California. The firm ranked No. 13 on the 2024 CNBC FA 100 list.

“Do you need the money six months from now, or do you need the money six years from now?” he said.

That timing matters because financial advisors generally recommend keeping money for short-term goals out of the market. There can be more flexibility for intermediate-term goals of three to five years, but it’s still wise to prioritize protecting your balance. After all, you don’t want a bad day in the market to impact your ability to put in an offer on a home.

But that doesn’t mean your down payment funds need to sit in a basic savings account, either.

Here’s how to figure out how much money you might need, and some of the options for safely growing your balance:

Understanding how much money you might need can help you better gauge your timeline and the appropriate assets for your down payment.

As of the second quarter of the year, the median sales price of U.S. homes is $412,300, according to the U.S. Census via the Federal Reserve. That is down from $426,800 in the first quarter, and from the peak-high of $442,600 in the fourth quarter of 2022, the Fed reports.

So, for example, if a homebuyer is looking to put a 20% down payment on a $400,000 house, they might need to save about $80,000, said certified financial planner Shaun Williams, private wealth advisor and partner at Paragon Capital Management in Denver, Colorado. The firm ranks No. 38 on the FA 100.

Of course, a 20% down payment may be traditional, but it’s not mandatory. Some loans require as little as 5%, 3% or no down payment at all. Down payment assistance programs can also cover some of the tab.

In 2023, the average down payment was around 15%, with first-time buyers typically putting down closer to 8% and repeat buyers putting down around 19%, according to the National Association of Realtors.

Just be aware that if you put down less than 20%, the lender may require you to buy private mortgage insurance. PMI can cost anywhere from 0.5% to 1.5% of the loan amount per year, depending on factors like your credit score and down payment, according to The Mortgage Reports.

A certificate of deposit lets you “lock in” a fixed interest rate for a period of time, Dennehy said. You can buy a CD through a bank or a brokerage account. 

Term lengths for CDs can span from months to years. The annual percentage yield will depend on factors like the interest rate at the time, the term of the CD and the size of deposits.

If you need to access the funds before the CD matures, a bank may charge a penalty wiping out some of the interest earned, Dennehy said. Some banks offer penalty-free CD options, too.

With brokered CDs, there’s often no penalty charge for early withdrawal, but you are subject to whatever the CD is valued at on the secondary market, he said. You may also face sales fees.

As of Oct. 23, the top 1% 1-year CDs earn around 5.22% APY while the national average rate is 3.81%, per DepositAccounts.com.

Backed by the U.S. government, Treasury bills are an asset that give you a guaranteed return, with terms that can range from four to 52 weeks. The asset could be less liquid, depending on where you purchase.

T-bills currently have yields well above 4%.

You can purchase a short-term or a long-term Treasury depending on your goal timeline, said Dennehy.

Treasury interest is subject to federal taxes, but not state or local income tax. Stacked against CD rates, Treasurys can offer a “comparable rate with less of a tax impact,” said CFP Jeffrey Hanson, a partner at Traphagen Financial Group in Oradell, New Jersey. The firm ranks No. 9 on the FA 100.

3. High-yield savings accounts

A high-yield savings account earns a higher-than-average interest rate compared to traditional savings accounts, helping your money grow faster.

The top 1% average for high-yield accounts is 4.64% as of Oct. 23, per DepositAccounts.com. To compare, the national average for savings accounts is 0.50%.

Their ease of access makes a HYSA especially suitable as you get close to starting your home search.

“High-yield savings accounts [are] great if you’re going to be buying in the next year,” Williams said.

4. Money market funds

A money market fund generally has a slightly higher yield than a HYSA, said Dennehy. Some of the highest-yielding retail money market funds are nearly 5% as of Oct. 23, according to Crane Data.

But a HYSA is typically insured by the Federal Deposit Insurance Corporation. A money market fund is not, said Dennehy.

Still, money market funds are considered low-risk and are intended not to lose value, according to Vanguard. They may be eligible for $500,000 coverage under the Securities Investor Protection Corporation, or SIPC, when held in a bank account, Vanguard notes.

Although more students are eligible for federal financial aid, fewer high schoolers are pursuing a four-year degree. Increasingly, college is becoming a path for only those with the means to pay for it, many studies show. 

Although undergraduate enrollment is up overall, the number of new first-year students sank 5% this fall compared with last year, with four-year colleges notching the largest declines, according to an analysis of early data by the National Student Clearinghouse Research Center.

“It is startling to see such a substantial drop in freshmen, the first decline since the start of the pandemic,” Doug Shapiro, the National Student Clearinghouse Research Center’s executive director, said in a statement.

More from Personal Finance:
Some families pay $500,000 for Ivy League admissions consulting
These are the top 10 highest-paying college majors
The sticker price at some colleges is now nearly $100,000 a year

“But the gains among students either continuing from last year or returning from prior stop outs [or temporary withdrawals] are keeping overall undergraduate numbers growing, especially at community colleges, and that’s at least some good news,” he said.

The declines in first-year student enrollment were most significant at four-year colleges that serve low-income students, the report also found. At four-year colleges where large shares of students receive Pell Grants, first-year student enrollment plummeted more than 10%.

The new Free Application for Federal Student Aid is meant to improve access by expanding Pell Grant eligibility to provide more financial support to low- and middle-income families.

As a result of changes to the financial aid application, more students can now qualify for a Pell Grant, a type of aid awarded solely based on financial need.

New data from the Department of Education shows that 10% more students are on track to receive Pell Grants this year, including 3% more current high school seniors.

But overall, the number of Pell Grant recipients is down significantly. In fact, the number of Pell Grant recipients peaked over a decade ago, when 9.4 million students were awarded grants in the 2011-12 academic year, and sank 32% to 6.4 million in 2023-24, according to the College Board, which tracks trends in college pricing and student aid.

Also, those grants have not kept up with the rising cost of a four-year degree. Currently, the maximum Pell Grant award rose to $7,395 — after notching a $500 increase in the 2023-34 academic year.

Meanwhile, tuition and fees plus room and board for a four-year private college averaged $58,600 in the 2024-25 school year, up from $56,390 a year earlier. At four-year, in-state public colleges, it was $24,920, up from $24,080, the College Board found.

Experts have continuously warned that ongoing problems with the new FAFSA have resulted in fewer students applying for financial aid, which could also contribute to declining enrollment.

“The changes from FAFSA simplification were supposed to increase the number of Pell grant recipients. This was before all of the chaos ensued,” said higher education expert Mark Kantrowitz.

Last year, 45% of college applicants reported frustrations with the process and 12% said they ultimately chose a community college, technical school or other alternative because of their FAFSA experience, according to an exclusive look at Jenzabar/Spark451′s upcoming college-bound student survey. The higher education marketing firm polled more than 5,400 recent high school graduates in September.

Rising college costs and ballooning student debt balances are still a major concern, causing more students to question the return on investment, experts also say. 

“There is growing skepticism and paranoia about the value of a degree,” said Jamie Beaton, co-founder and CEO of Crimson Education, a college consulting firm. 

Meanwhile, the number of students pursuing shorter-term accreditations is growing rapidly, with enrollment in certificate programs up 7.3%, according to the National Student Clearinghouse Research Center.

Subscribe to CNBC on YouTube.

Health savings accounts have become popular workplace perks with significant tax-advantaged investment opportunities — but many Americans have no idea how they work. 

About 26 million people had an HSA at the end of 2023, according to Devenir, a research and investment firm based in Minneapolis. Assets in these accounts reached about $137 billion by this June, and are expected to grow to $175 billion by the end of 2026.

“We definitely are seeing growth in the number of people who sign up,” said Todd Katz, executive vice president of group benefits at MetLife. Strong market performance has also spurred growth of the investments in HSA accounts, helping to boost balances.

Still, 50% of U.S. adults don’t understand how HSA’s work, according to a survey by Empower, a financial services company. Only 34% of employees with access to an HSA have enrolled in the benefit, and just 24% who have enrolled have funded their accounts, according to MetLife’s U.S. Employee Benefits Trends Study conducted in September 2024.

That can be an expensive miss: HSA benefits are “unmatched, really, relative to Roth IRAs or 401(k)s,” said Christine Benz, director of personal finance and retirement planning at Morningstar. “You just don’t see tax benefits like that.”

Here’s what to know about HSAs, and how to take advantage:

HSAs are tax-advantaged accounts for health expenses. Funds roll over from year to year, and the account comes with you if you change jobs. HSA money can also be invested.

To be eligible to contribute to a health savings account, an individual must be enrolled in a high-deductible health plan, or HDHP. For 2025, the Internal Revenue Service defines that as any plan with an annual deductible of at least $1,650 for an individual or $3,300 for a family. The maximum out-of-pocket expenses for an HDHP are $8,300 for an individual or $16,600 for a family. 

A saving, spending and investment account, HSAs offer three ways to save on taxes.

“You’re able to put pre-tax dollars into your health savings account. As long as the money stays within the confines of the HSA is it is not taxed,” said Benz, the author of “How to Retire.” “And then, assuming that you pull the funds out and use them for qualified health care expenses, those funds aren’t taxed either. So you earn a tax break every step of the way.” 

In 2025, eligible individuals can contribute to a HSA up to $4,300 or $8,550 for family coverage.

Also, if you take money from your HSA for a non-medical expense, you have to pay federal income tax and a 20% tax penalty on the money withdrawn. Accountholders age 65 and older can avoid that penalty, but will still pay income tax.

There’s a lot to think about, so experts say take the time to weigh the pros and cons of the options.

A new report from Voya Financial finds 91% of working Americans pick the same health plan from the year before. But experts say it can pay to crunch the numbers. 

“If you’re somebody who has to go to the doctor all the time, you know you’re going to meet your deductible, you probably want to go with a copay plan, but you need to run the numbers,” said Carolyn McClanahan, a physician and CFP based in Jacksonville, Florida. She’s a member of CNBC’s Financial Advisor Council.

Benz agrees, adding that “successfully using the high deductible plan very much rests on taking advantage of that health savings account.”

SIGN UP NOW: For more advice on how to grow your wealth, achieve your investment goals, and safeguard your money, join us this Thursday, October 24 at 1pm ET for a free, CNBC Your Money event. Register here.