So, you find yourself with some extra money on hand and want to put it in a safe place where you could potentially earn some cashback from an investment. A bank or credit union that offers accounts that are insured and have APY% is what many people would recommend. Still, there might be other, better ways for you to earn money. Here are a few good money investment ideas to think about:
Money market account
This type of bank deposit usually pays a higher interest rate than a typical savings account. However, they might require a higher minimum investment. As with any bank, make sure you open a money market account that is FDIC-insured. As for liquidity, these accounts tend to be highly liquid. However, this higher rate also means that there might be some restrictions or limitations on the withdrawals.
Money market mutual fund
This investment type is a different type of investment than a money market account. While this is also a relatively safe option, the money is not FDIC-insured. It can be considered short-term security, such as corporate debt, municipal debt, treasury, or bank debt security. Due to it being a mutual fund, you will need to pay an expense ratio to the fund company for managing the assets.
Also among good money investment ideas is a corporate bond. Large corporations issue these to help fund their investments. They are considered safe for the most part, as long as you choose a corporation with stable finances. They pay out interest regularly, a few times a year. Instead, opt for a bond FUND that serves as a collection of various corporate bonds for diversification.
Short-Term Government Bond Funds
Government bonds work like corporate bonds except that the US Federal government and related agencies issue them. These bond funds purchase investments like T-notes, mortgage-backed securities, T-Bonds, etc. They are low-risk investments in general, although the FDIC does not back them. There is also the issue that many people don’t trust the word of the Federal government these days.
As for liquidity, government bonds are highly liquid. As a result, you can buy and sell them any time the stock market is open.
Other Good Money Investment Ideas
You now have some excellent money investment ideas. However, if these aren’t right for you, there are plenty of other options:
- REITs (real estate investment trusts)
- Certificates of Deposit
- Index Funds
- Treasury Bills
Regardless of your investment knowledge and experience level, you can always find good money investment ideas, tips, resources, tutorials, and recommendations through Motley Fool. So let it be your stock advisor and receive top stock recommendations from award-winning analysts.