Best Short-Term Investments For Your Money

Joseph Meyer
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High Yield Savings

When you apply for a savings account, the bank will set a non-negotiable interest rate that does not include the the state or national average. But they will also pay a rate that is based on the average rate across the country.

High-yield savings accounts are the accounts that offer the absolute best interest rate, often well above the national average. You can call your bank and find out what rates they offer, or you can compare high-yield savings accounts online. That way, you know that you’ll be getting an excellent interest rate on your money.

If you want easy access to your money, consider a high-yield savings account. The interest rates on checking, savings and money market accounts vary widely, and while some may seem like fantastic deals for a few months, they dissolve as rates change. However, high-yield accounts usually give you a fixed rate for the duration of your arrangement.

If you want the highest rate possible, expect to find a short-term high-yield savings account with a limited time frame. These accounts usually run from 6-12 months, but some are for a shorter duration. If you want your money back before the time runs out, be prepared to pay a hefty penalty fee and/or keep a minimum balance in your account at all times.

Money Market Accounts

A Money Market account is a type of savings account that offers high interest rates like a checking account but is generally a safer way to store your cash. Money market accounts are also frequently called money market deposit accounts (MMDA) or money market mutual funds.

To earn a decent interest rate, you need to keep a minimum balance in your money market account. The average amount of money you keep in the account may decide how much interest you earn.

A money market account is usually a stable and secure alternative to other types of savings, such as a regular savings account or a certificate of deposit account (CD). The minimum balance associated with a money market account is often lower than the minimum balance required for a certificate of deposit account (CD) but they don’t offer higher interest rates than a regular savings account.

Money market accounts are insured by the Federal Deposit Insurance, just like standard checking and savings accounts so they’re a safe way to invest and earn a higher rate of interest than a standard account.

You may also be able to take money out of the account if you need the funds for an emergency. Unless you give the bank advanced notice, you’ll need to pay an early withdrawal penalty because your money market account is considered a short-term account, not a long-term account like a certificate of deposit account (CD).

Peer-to-Peer Lending

Peer-to-Peer lending is a type of investing that connects individuals with lenders who have surplus cash that they want to lend out for a return. The loans may cover expenses such as home improvements, debt consolidation, and education. The loans are often listed on a third-party site that acts like a matchmaking platform. The borrowers, who may or may not be accredited, have the option to either pay back the loan in a set period of time or with a fixed interest rate over a longer length of time.

Peer-to-Peer lending can be a good alternative to investing in the stock market because investing in it could earn you more money than a traditional savings account.

Therefore, peer-to-peer lending can be considered a good alternative to a high interest savings account or certificate of deposit. On the other hand, peer-to-peer lending carries a much higher risk compared to savings accounts and certificates of deposits.

Traditionally, Peer-to-Peer lending has not allowed “General” investors to receive any sort of financial benefit, but there are a few new sites that will allow you to make a return on your investment; in most cases just an extra percentage point or so, but every little bit counts!

Top 11 Best Short Term Investments That Limit Your Risk

The best investments are the ones that give you the most profit in the shortest amount of time. Generally, there are two different kinds of long-term investments: There’s career building investments that generate long-term, low-risk, consistent profits over a long period of time, and then there are investment that give you a big return in a short period of time (e.g., stocks that pay dividends).

This article will first help you choose the type of investment you should make – and then share a few options that will get you started. To narrow down your options, I’ll use the PIE framework (Purpose, Importance, and Ease) to help you sort out the options. I’ll discuss four factors:

Purpose: What type of investment do you want to make?

Importance: How important is this investment?

Ease: How much time, energy, and moolah …

do you have to spend to make this happen?

Online Savings Account

One of the best short-term investments you can make is online savings account or CD. These are great options for your short-term savings goals because they give you a higher interest rate than a standard savings account and they don’t require you to worry about odd-ball financial terms.

All the balances you see on the right are interest-earning. They are a great way to make sure your money is working hard for you.

Take a look at the different balances to see which ones fit your short-term savings goals.

Your savings goals may be far off in the future, but if you put your money in a 12-month CD, you’ll have to leave it with the financial institution for the next year. Keeping your money in a savings account increases your chances of accessing it when you need it.

Remember that these products are bank products, and as with any financial product, do some research and shop around for the right product that fits your financial goals.

Ally Bank is an online bank that offers online savings products. I have banked with them since 2005. By my account, it is an excellent financial product and has outstanding customer service. I have never once had to conduct business with a human teller. My business is directly conducted with a computer.

discover

Investing is no longer the domain of the rich and famous only. In the recent years, a small number of investors have started to enjoy the benefits that come with short-term investing.

The trick to benefiting from short-term investments is to know how much risk you’re taking on and determine how much you can potentially earn. That’s why, I recommend investments with a time period less than a year. The shorter the period, the less you’re likely to lose.

The advantages of short-term investments are the potential for large returns with relatively low risks. For example, if you invested €1,000 in 2008 and withdrew it a year later, you would have had a return of 22% compared to a loss of 12% if you had waited a full year.

The minimum investment for short-term investments is much smaller than long-term investments because of the much higher potential for profit. The catch, however, lies in the higher potential for loss. For example, if there is a major stock market crash in the year after you invest in stocks, you will have a relatively high chance of losing your money.

Here are some of the best short-term investments you can make right now.

CIT Bank

Get a 1.85% Savings Account

If you are just starting out, you should save your money in a savings account. It’s a good way to ensure that you don’t lose money before you start investing it. The trick here is to pick a good bank that pays a higher interest rate than the national average.

CIT Bank is currently offering an interest rate of 1.85% on all savings accounts. The lesson from 2008 is that you won’t lose your money in a savings account. You probably won’t get rich either, but at least your money will be safe.

{1}. Credit unions offer some of the best interest rates. If your local bank doesn’t pay a competitive rate, join a credit union. They often advertise their rates on big banners at the branch, so you should be able to find one nearby and sign up in a few minutes.
{2}. IRA accounts of different sizes can be opened at most banks and credit unions. These accounts have different eligibility requirements based on income, but you’ll probably qualify for one if you have a job.

UFB Direct

UFB Direct is a good online broker that is ideal for people who would like a slick, professional, and user-friendly experience.

Their investing features will be ideal for new investors, allowing them to purchase shares, ETF’s, and bonds with fewer fees, too. Those who are new to investing will particularly like the fact that UFB Direct will facilitate regular investing and automatic investing for you at no extra charge.

If you’re an experienced investor and know exactly what kind of investment you’d like to make, or if you’re looking for investment advice and guidance, then UFB Direct isn’t right for you. However, they do have advice and resources for those who have a basic knowledge of investing. This may include learning how stockbrokers are different to banks, how to go about buying stocks, and how to calculate your investments.

Money Market Account

This account is very similar to a savings account. The interest rates can be a bit higher, but the main difference is that you can only deposit a set amount of money at any time. The sum of money deposited for a specific length of time becomes unavailable for other uses. Your money is still liquid since you can access it at any time.

This account is a good short term investment because it is still liquid. If you can see that you’re in dire financial straits in the short term, but you know you have enough money to save for a term to pay for it later, this account is for you.

Fast Access: Accessing the money deposited is not a problem, and that’s one of the benefits of this account. Since it’s an investment, you have to choose a period of time that’s right for you, but you still have continuous access to the money. If you find yourself in need of money in the short term, you can still withdraw money from this account.

CIT Bank

Get a 1.85% Savings Account

If you are just starting out, you should save your money in a savings account. It’s a good way to ensure that you don’t lose money before you start investing it. The trick here is to pick a good bank that pays a higher interest rate than the national average.

CIT Bank is currently offering an interest rate of 1.85% on all savings accounts. The lesson from 2008 is that you won’t lose your money in a savings account. You probably won’t get rich either, but at least your money will be safe.

{1}. Credit unions offer some of the best interest rates. If your local bank doesn’t pay a competitive rate, join a credit union. They often advertise their rates on big banners at the branch, so you should be able to find one nearby and sign up in a few minutes.
{2}. IRA accounts of different sizes can be opened at most banks and credit unions. These accounts have different eligibility requirements based on income, but you’ll probably qualify for one if you have a job.

UFB Direct

UFB Direct is a good online broker that is ideal for people who would like a slick, professional, and user-friendly experience.

Their investing features will be ideal for new investors, allowing them to purchase shares, ETF’s, and bonds with fewer fees, too. Those who are new to investing will particularly like the fact that UFB Direct will facilitate regular investing and automatic investing for you at no extra charge.

If you’re an experienced investor and know exactly what kind of investment you’d like to make, or if you’re looking for investment advice and guidance, then UFB Direct isn’t right for you. However, they do have advice and resources for those who have a basic knowledge of investing. This may include learning how stockbrokers are different to banks, how to go about buying stocks, and how to calculate your investments.

Alternative Investments

Your focus in investing is to maximize your return relative to the volatility you’re taking on. It’s an important distinction that many make the mistake of overlooking.

One of the ways I’ve sought to meet that goal is by looking at alternative investments. The more risk you take, the higher your return should be. That’s a fundamental tenet of investing, which has earned capital market theory the same untouchable status as Heisenberg’s uncertainty principle or the inverse-square law of gravity.

Some alternative investments, such as hedge funds, are actively run by fund managers. Others include publicly traded stocks of companies that don’t fit into the S&P 500. That is, their business models employ strategies alternative to the traditional capitalistic construct. I look at a lot of these companies, as they tend to trade at attractive valuations.

I’ve found that exploring these different investment categories has filled a void in my portfolio. Among other differences, investments in each category tend to behave differently. For example, companies in the alternative space may exhibit varying levels of sensitivity to economic conditions.

If you’d like to have exposure to a diverse set of investments that exhibit independent levels of risk, you may want to think about adding alternative investments to your portfolio.

Fundrise

Has access to over 4,800 real estate investments.

A major advantage of investing in real estate is that your money can earn a steady return while you continue to do whatever it is that you do instead of being tied down to a particular investment.

Many people who invest in real estate treat it as a long-term investment. But if you want some income now because you’re cash-strapped or you’re preparing for an early retirement, you can make real estate work for you in just a few weeks.

Recent innovations in technology have made it possible for anybody to make investments that used to be the exclusive domain of “big money.” This has expanded the range of real-estate investments that are available to people who don’t have large sums of money.

We’re mentioning some popular real-estate investment options below, but we’ve included a caveat regarding fees in most cases. Make sure to take commissions into account because they can eat into your investment profits.

Lending Club

Vs. Prosper

Lending Club and Prosper are two of the best options available for peer-to-peer investing. Investors can make various term and amount loans to individuals.

Prosper and Lending Club are two of the largest peer-to-peer lending platforms on the market, with many similarities between them. Both offer investors high returns on short-term loans to individuals, which start at a few hundred dollars. They are both relatively new organizations that have been around since 2006 and 2007, respectively.

Most of the investors on both of these platforms are looking for alternative investments that will pay high rates of returns. The benefits of peer-to-peer lending include:

  • _ Low expense ratios
  • _ Low risk for default
  • _ Unparalleled access to borrowers

Worthy

With so many options to choose from, it can be hard to decide where to invest your cash. If you’re looking for short-term investment ideas, one of the simplest strategies is to invest in funds. The most important thing is to consider the timeline of your investment. If you are looking for short-term investment ideas, you will have to be willing to accept lower rates of return than if you are investing for the long term. Here are four good short-term investment ideas. They are all good because they have a competitive rate of return and they are not risky.

Be aware that many investment options, particularly mutual funds, may only be available through a financial professional.

Exchange-Traded Funds

The best short-term investment ideas include exchange-traded funds, which are investment vehicles that hold a basket of other investment securities. Exchange-traded funds can be based on nearly every potential investment strategy. So when you’re looking for short-term investment ideas, this is a good place to start. Exchange-traded funds are also a good investment if you need to get some cash out of your investment later on because you can sell shares of exchange-traded funds on the stock market quickly.

Certificates of Deposit (CDs)

The problem with CDs is that although you may have it for a few years, there still isn’t much you can do with it. Sure, you can play it safe and pump it into a savings CD, but where’s the fun in that? Some CDs have a bump in return if you leave the money in it for a year or more, but you won’t see much of a difference even if you wait even longer. They don’t offer much rise in returns because the rates are already fairly low.

However, CDs are great for low-risk investments because CDs are insured by the FDIC. If your bank fails, you’ll get your money back with interest. It’s very unlikely that your bank will fail.

To make an investment that pays twice as much for a similar risk level, you need to double up your money, almost immediately. This might sound impossible, but it isn’t. If you socked away your money in a CD for a couple of years, chances are they’ve only doubled in value. To double your money, you have to do it in less than one year.

A Roth IRA

Is a type of individual retirement account (IRA) created by the Taxpayer Relief Act of 1997. It has become one of the most well-known types of Individual Retirement Arrangements (IRAs). It was named after United States Senator William V. Roth Jr., who took a lead role in passing the law that created this investment program.

Online Checking Accounts

Finding ways to save money has become an increasingly challenging task. Consumerism has taken over the United States and gone global. That means that we are constantly being persuaded to purchase things we don’t need. That means extra bills to pay and extra time wasted. As you’re forced to prioritize certain financial goals over others, it’s important to remember that you can still save money without giving up on your dreams.

People are increasingly relying on today’s technological advancements to make bank transactions easier, more efficient and to find ways to save money.

Online Checking Accounts

The first way to save money is by opening an online checking account.

The benefit of online banks is that they are generally less expensive than the traditional large banks.

Convenience and Increased Accessibility

It is convenient to have simple and efficient checking account.

If you are just starting out, this type of account can benefit you in more ways than one.

One of the main reasons many of us don’t pursue our dreams is the way in which we handle our finances.

Discover

How to make sizable profits … and how to avoid devastating losses.

Bank novo (business)

chase (college students)

Opening a savings account is a better short-term investment than most college students realize. While you may think that opening a savings account is a waste of time, it is actually a great way to save a little money over the short term. It is also the easiest way to save money because you can easily link your account to your checking account, and you can access your cash whenever you like.

Short-Term Bond Funds and ETFs

In general, when we talk about investing, we are discussing a long-term proposition. That’s because, generally, the longer you have your money invested, the higher your expected rates of return. However, there are a few reasons you might want to consider choosing short-term investments for your money. For example:

Liquidity … if you need your money back quickly, short-term investments might be right for you.

Risk Management … if you want to limit the amount of risk you take on, or you want to keep your overall portfolio to a certain level, short-term investments might be right for you.

Income … if your goal is to make the most money in the shortest amount of time, short-term investments might be right for you.

Taxes … if you want to defer your capital gains distributions to a later date, short-term investments might be right for you.

As you can see, there are a lot of reasons why short-term investments are appealing. But the truth is, choosing short-term investments is a great way to lose a lot of money. Here is a look at what you are giving up when you choose short-term bonds or ETFs as your investment vehicle.

5-Year Treasury Inflation-Protected Securities

(TIPS)

So what am I recommending? I suggest that you consider short-term Treasurys like the 5-year Treasury Inflation-Protected Securities (TIPS). (TIPS are a type of Treasury security that are adjusted to keep pace with inflation.)

Also, if you’re goal is to increase your income by investing your money, I suggest Treasury Inflation Protected Securities.

(TIPS are a type of Treasury security that are adjusted to keep pace with inflation.)

TIPS are an easy way to get exposure to inflation, and they tend to yield a bit more than traditional Treasurys. But as with all bonds, they come with the downside of fluctuating interest rates. But giving up a little yield to be protected against the eroding effects of inflation could be a smart choice if you’re nearing retirement or have a bit more time before you need to spend that money. And since TIPS are generally available with short maturities of as little as five years, you don’t have to worry about trying to guess interest rate swings. Over the long run, TIPS should deliver higher average returns than everything except possibly dividend-paying stocks.

Municipal Bonds and Corporate Bonds

Municipal Bonds are offered by official bodies and the interest gained can be free of federal and local income tax subject to certain restrictions. These can be obtained through a broker or municipal offices and must be held to maturity to guarantee the return.

Corporate Bonds are offered by public and private entities and generally trade in secondary markets in the United States. These can be issued by global or domestic firms and are more risky with a higher potential for providing higher interest rates.

Annuities can also be used as short term investments, although they are generally considered a long term financial planning tool. These are options that provide guaranteed fixed income for a specific term or lifetime at a fixed interest rate. These are also issued by the official bodies and must be held to maturity for the promised return.

Pay Off High-Interest Debt

High interest debt sucks. It’s a background dentist’s drill of constant worry that it’s going to attack again at any moment, and if something were to happen that you couldn’t work or pay regular bills, you’d be completely ruined. Paying off high interest debt may turn out to be one of the most significant financial decisions you make, but the pay off can be immediate.

Cash Back Rewards Offers

Cash back cards can be a great short-term option. They offer a flat amount in return on your purchases.

The amount is non-negotiable and the rewards don’t increase the way that the ones on a travel rewards credit card would. Cash back cards generally have a set return, you know ahead of time what you’ll get, and there are no surprises or tricks.

If you’re looking for a rewards card that will let you earn the most value for your money, a cash back credit card may be the best option for you.

Bonus Idea – Prosper

Prosper is a peer-to-peer lending marketplace designed to connect you with lenders. There are personal loans, mortgages and business loans. The one I find more interesting is the personal loan format.

These work like typical peer-to-peer loan formats – lenders provide funding to you via Prosper. You build a profile that shows your income and assets. You can then choose among loans from individual peer-to-peer lenders who are pre-vetted by the site.

Prosper provides a personalized loan rate analysis, and your loan is funded in as little as 7 days (though it may take longer). The loan rates range from 6-35% depending on your credit rating.

The Bottom Line

If you are looking for a short-term investing strategy to create more cash flow in the short term, I would recommend a certificate of deposit (CD). A CD is a financial tool designed to act like a savings account. Yet, unlike a savings account, a CD offers a higher interest rate. So, rather than putting your money in a high-yield savings account, which doesn’t offer substantial growth potential on your initial investment, you can put the money into a CD and earn a higher rate of return.

A CD is generally a more conservative option and comes with more restrictions. You will typically be required to leave your money in the investment for a specified amount of time. However, if you have some money you would like to put aside for one year, five years or even more, a CD can be a viable way to grow your money.

More specifically, this is how a CD works. The bank or other financial institution will offer you an interest rate that applies to your full deposit or on a daily basis. That interest rate will be locked in for the term of the CD. For instance, if you invest in a six-month CD, the rate of return will be guaranteed for the first six months of the investment.

About the Author

Michael is the chief editor of timewise.me. His hobby of keeping active has developed into a habit of choice. An arsenal of ways to exercise is at "his disposal" for an active lifestyle.

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What are the best investments in the long term? What’s the real definition of investing? What are the most secure investments? This simple article will answer the questions above and show you the top 3 profit investments in the short term.

For many people, long-term assets are the focus of their investments. With a long-term asset, you should expect to see about a 10% to 20% return on investment (ROI) in the first year. If your long-term investment’s ROI is less than 10%, most people will consider it to be a small return. If the ROI is more than 20%, most people will consider it to be a good return.

Short-term investments have a different focus, because the owner isn’t relying on making a profit from the investment in the near future. For short-term projects, the return on investment is often not known either. Sometimes it’s known up front but left open to change depending on how well the project is received. Short-term investments can be advantageous because the owner has more control over how the money is spent. Also, a short-term investment might never pay off if it lacks demand.