Now that the stock market is not very certain due to sinking companies, the volatility of the economy, real estate bubble among other factors leading to fluctuation in the value of money, which are the best places to keep the money? You need to keep your money in a place that brings high returns. Such a place should be free from risk or have a very low risk.
If you’re looking to invest your hard-earned money, it can be overwhelming to decide where to put it. If you’re young, you are faced with a lot of challenges in determining where to invest your money and enjoy the profits for decades to come. When saving for retirement, stocks are the best option due to the high rate of return over an extended period. However, for short-term investments, where do you go?
If you are looking for the safest places to put your money, here are the top places you should consider.
Savings accounts are perhaps the most honest and most convenient place to put your money. These accounts are very liquid such that you can get money in or out whenever you want. The specific features defining a savings account include interest rates, account balances and the use of cards. In most cases, banks offer a meager interest that is not enough to keep up with the inflation which is mostly 0.06%. Some banks may let you open an account with as low as $1 which others require anywhere between $50 and $50,000 as minimum operating balance.
Just like savings accounts, money markets are safe and liquid accounts which allows you to store money up to a certain amount, mostly $250,000. A couple of aspects make money markets to be different from savings accounts. In money markets, the interest rate is a bit higher than a savings account. To operate these accounts, the minimum account balance can be anywhere between $1,000 and $25,000. There are a certain number of transactions you can make per month as per regulation.
Certificates of Deposits
A certificate of deposit refers to a fixed term loan that you make to your bank. With CDs, you agree with your bank to keep your money for a specified time, it could be six months, one year or three years, in exchange of an agreed-upon interest rate that is guaranteed when the certificate of interest matures. CDs are insured, and this means you can’t lose your money. The key downside of CDs is that it ties down your money for a specified period. Though it is possible to withdraw it before maturity, you will pay the price for that.
The downside of low-risk investments is that the interest rate is quite low. But all in all, you don’t want to put all your vital eggs in one basket. Some of the best low-risk investments include; treasury securities – which are loans that you give to the government including treasury bills, treasury notes, and treasury bonds. Treasury bills take weeks to a year to mature. Treasury notes are medium and may take 2 to 10 years to mature while treasury bond is long term and may take up to 30 years to mature with interests paid every six months.