“Investing the proceeds after selling your home can maximize your equity. Investing in index or mutual funds can be a relatively safe way to let your assets start building your wealth,” Musson said.

Carrillo agreed and suggested diversified investments such as U.S. large-cap equities or cost-effective index funds in thriving sectors like technology.

If you’re uncertain about exposing your proceeds to market volatility, the safest places to park these proceeds is into a CD, where you can earn interest over a set period of time, Musson said.

“If you plan to buy another house within a couple of years or you have plans for your money but aren’t ready to do it right away, a CD keeps your money somewhat accessible and safe while still earning interest.”

Additionally, these funds could be a big chunk toward future goals, such as your retirement or a child’s college education.

“Many people are not prepared for retirement or their children’s education, so selling a home can provide an opportunity to catch up and experience tax-advantaged investing,” Musson said.

High-interest debt can drain your paycheck, as you end up owing more than you borrowed. Paying off that debt with the proceeds of the sale of a home can free up your finances to prepare for a stable future, Musson pointed out.

Specifically, Carrillo said, you should try to pay off student loan debt — especially as the Trump administration has just stated that they will be suspending some student loan repayment plans, making it harder to delay or reduce payments.

“With over 5 million borrowers recently in default, significantly impacting their credit scores by an average of 130 points, eliminating this financial burden can provide long-term relief and open doors to better credit opportunities,” he said.

At the very least, it’s a good idea to put your proceeds into a high-yield savings account while you decide what else to do with it, as you’ll earn interest, Carrillo said.

Additionally, safer short-term vehicles like high-yield savings accounts (many of which are offering 4% to 5% annual returns) deliver steady, low-risk growth while maintaining liquidity.

A high-yield savings account is also the best place to keep your emergency fund, Musson said. “So, if you don’t have a fully funded emergency savings account, you may be able to immediately fund yours with the profit from selling your home.”

If you’re thinking about selling because you want to get access to the equity you’ve built up in your home, there is one other option, according to Michael Gifford, CEO and co-founder of Splitero — and that’s a home equity investment (HEI).

HEIs allow you to access the cash you need for things ranging from paying off debt or renovating your home, without taking on additional debt or having to make monthly payments, he explained.

“Homeowners can also stay in place and still access the cash they need — without trading in their 3% mortgage for a 7%-plus one.”

Whatever path you take, be sure to talk it through with a financial advisor so that you don’t end up wasting opportunities to grow your funds and minimize taxes.

More From GOBankingRates

Sources

This article originally appeared on GOBankingRates.com: Finance Experts: 8 Best Money Moves To Make With the Proceeds of a House Sale