Everyone could use a little more cash than what they have– it’s a universal truth. That might be with the exception of Jeff Bezos, of course.
The reality is that a large majority of Americans are living paycheck to paycheck. If you’re in a similar situation, you may be in need of some short term investment options to help increase the money you have access to.
What are some of the best short-term investments out there? Read on and we’ll walk you through what you need to know.
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CD Accounts
What’s a great way to make some extra cash in a short amount of time? One of the easiest and least risky is a CD account at your local bank branch.
CD, or a certificate deposit account, are accounts at banking institutions that pay much higher interest rates than the average account. This is because these accounts are locked in for a longer amount of time than a standard account.
Depositors are given the option to invest their cash somewhere between three and five years, though some banks will offer shorter-term agreements. While that may not sound as short-term as you need for your particular situation, it beats waiting forty years for your ROTH IRA to cough up the dough you need.
The longer you invest in a CD, the more money you’ll make, but you can likely find an account for any period of time you’d desire.
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Bond Funds
What if you only have a year or two in order to make some extra cash? Another great shorter-term investment option is a bond fund. Bond funds are accounts that are run by financial advisors and often yield more money than you would find through other short-term investment options.
However, these bond funds boast a bigger degree of risk to boot. Your investment is not guaranteed with a bond fund, but it is a great opportunity to make money. There are many different options out there that will allow you to find a balance between risk and reward that you’re comfortable with.
However, there is no penalty in pulling out money early in a bail fund, unlike with a CD. If something goes wrong in your life, you’ll always have access to the money when you need it.
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Reward Checking Accounts
The most financially rewarding investments are longer-term ones, more complicated. There are investment properties, long-term stocks, so forth.
If you’re just getting into investing, these might be too much for you to take on right away. However, there are simple steps you can take to get into the habit of managing your money.
Even using a credit card reward program is a good way to get your feet wet. Discover and many other brands allow you to get a certain amount of cashback on purchases. The more you use and pay off your credit card, the more money ends up back in your account.
It’s a great way to end up with some extra cash at the end of each month.
The Best Short Term Investments to Consider
Making money isn’t a talent that comes easily to everyone. Sometimes you need to be pointed in the direction of the best short-term investments to know how to get started. The above list is an excellent primer on the topic.
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Interesting related article: “What are Bonds?”