Short term investing should be part of your long term game plan for making money. This can include a regular savings account or the stock market. There many other options to consider also when investing short term. Here are some investing options that you might want to consider.
High Interest Savings
Some banks offer high interest savings accounts that I just like any savings accounts that you have used before. Capital One has such a product that I have been personally using for about a year. The current APY is 3% which is a far cry from their normal at .30% APY. I’ve really liked using it since I can deposit and withdrawal as I need but while it’s sitting there it’s making me more many than what I was previously using.
Most people know what Certificate of Deposits or CDs are. With CDs you deposit your money for a length of time until maturity. You can choose from 6 months to multiple years. The down side to investing with CDs is you will be penalized if you remove the money before the maturity date. If you are wanting to the funds to be liquid, this may not be the investment option you will want.
They are also higher in interest than a savings, but because they are quite safe they do not have a significantly higher interest rate. Capital One for instance has rate that are a little over 4%. Each bank will have their own rate, though they are all based on the federal interest rates.
I have been looking into Treasury Notes, or T notes, for my own personal investing. I want something that is higher yielding but is also flexible or liquid. This is a little difficult because you generally can’t have your cake and eat it too. T Notes are through the federal government, but you can purchase them through bank institutions or brokerages as well. T Notes you have a certain minimum about, this varies whether you go through the treasury website or another institution. You can invest in 2 years, 5 years or even 10 years. The interest rate will remain the same in 6 month increments. The T note does have some differences so make sure you look at your specific needs before selecting it for your investment.
There are two different bonds, the I savings bond and the EE bond. You can remove your money after 1 year with both bonds, though you will lose 3 months of interest before the 5 year mark. The EE bond is guaranteed to double in 20 years and will continue to gain interest up to 30 years. The I bond does have a different interest rate than the EE and it is currently 3 times higher.
When we are making investing decisions time and accessibility are important considerations. High rate savings, Certificates of Deposit (CDs), Treasury Notes (T-Notes) and Savings Bonds are a few of the different options we have to choose from in order to make money while we sleep. Allow your money to work for you, work smart not hard and find ways to make safe investments with higher interest rates. The above options will accomplish the safety options with the interest rate.
How about you, what do you find to be beneficial for you and your investing situation?