Where to invest down payment while house hunting?

[Kim Leduff]

Hi BPers,

We are hunting for investment properties and in the meantime have a significant amount of cash in our checking accounts ready for when we want to pull the trigger with a down payment. I feel like there could be a better way to earn interest on this money while we hunt. One idea was to put it into Index Funds for the time being. Another idea is to put it in a high yield savings account (Some credit unions have 3% on amounts above 20k for instance). I'd love to know best strategies.

More Info:
This is for additional investment properties
Hunting can take 3-7 months
Amounts above 20k+