The 7 Best Short-Term Investment Plans For You!
Given the current prevailing market trends, the short-term investment might seem to be the right choice for the investors. A short-term investment enables an investor to invest their money, whether $10,000 or $100,000, with very less or no risk at all and assure them that their money will not be locked up for a long duration of time.
Any short-term investment is supposed to grow for a couple number of months to a few number of years and can be turned into cash or another type of investment as soon as they reach maturity.
The following is a list of short-term investment available today.:
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#1 Peer to Peer Lending
One can find a number of Peer to Peer lending websites on the Internet. These websites are used to connect investors to fit consumers who are looking for a loan and let investors work as banks, to provide a tiny percentage of various borrowers’ loans. In this process, investors buy notes and earn a monthly income in the shape of loan repayment and interest.
#2 Roth IRA
You might say that Roth IRA is not an investment. But you need to look closely and observe. Unlike the traditional retirement accounts like 401ks where you have to give an early withdrawal penalty along with income tax if you withdraw money before retirement, Roth IRA is totally a different case which is funded by after-tax income. Hence, you can freely withdraw any amount whenever you want.
#3 Certificate of Deposits (CD)
Wells Fargo and other banks provide a range of terms for their respective deposit accounts, spanning from 3 months to 5 years. Are you wondering What is the Wells Fargo Routing Number for California State? You will find also find the all the addresses and contact information of the various branches in the State of California.
A depositor can invest their fund for a specific period of time and with a longer period, comes higher returns. You may receive monthly interest payments by selecting the option at the time of submitting your form. But many people let their interest accumulate till the time of maturity.
#4 Checking Accounts (Online)
Online Checking Accounts gives you a number of benefits offered by online saving account but with more liquidity as the number of withdrawals is not limited. However, the interest rate is comparatively lower than what you would get in a savings account.
#5 Savings Account (Online)
Investing in an online savings account can assure a no-loss in principal so far that you keep the total fund at the bank in below the FDIC coverage of $250,000.
Although current interest rates are low, the risk-free return offered means you can relax. A number of decent online banks let you withdraw money a minimum of 6 times per month. This means you can freely withdraw cash at any time you want.
#6 Short-Term Bond Funds and ETFs
Short-Term Bond Funds are generally managed by professional financial advisors. Although bonds are not as lucrative as money markets, they promise a high earning. As bonds are direct products of the market, their yields generally vary in accordance with the current market conditions. For any investor with a time period of 1-2 years, short-term bonds can be the right choice since they mature within a span of 2 years or less. A person will need a brokerage account such as Scottrade, Betterment or E*Trade to trade bond funds and ETFs.
#7 Paying Off those High-Interest Debts
Suppose a person has a credit card with an interest rate of 15% with a balance of $10,000. This gives you an opportunity for a high return on your investment. Paying off this debt is similar to getting a 15% return on your $10,000.
You can either pay off high-interest debt on your own or take the help of financial tools like Mint. These tools can help you manage your finances in order to see the impact of you paying off your debt is having.