My husband and I are receiving $10,000 each from his mother as a gift after she inherited her father's trust. We both have IRAs, he has a 401k, I have a 403b and make required contributions to the MA Teachers Retirement. We have a rainy day savings. We have low interest rates (1.8%) on our 2 cars. He has no student loan debt. I have $16,000 at 2.8% and $27,000 at 6.8%. How should we invest our $20,000 with the idea that we want to use it as a down payment on a house. A house which we are not planning to even look into buying for at least 3 years, maybe as long as 5 years. We've considered just stashing it in our IRAs and then removing the principal amount later when we need it. Or a short term CD which would get us only slightly better return that stuffing it in the mattress. I suggested that we use half of it to pay down my student loans that are at 6.8%. Reducing the principal and thus the interest we pay on it. Thoughts or ideas on what we should do?