Tired of watching your savings grow at a snail’s pace? Parking cash in a savings account might feel secure, but with interest rates barely keeping up with inflation, it’s more of a holding pattern than a growth strategy.
To make real progress, you need investments that work harder for you. Here’s 10 methods go beyond basic savings, helping you build toward that big purchase or secure your financial future.
1. Stocks
Investing in stocks means buying small pieces of a company. When the company does well, the value of your stocks can go up, and you can make money.
However, prices can also go down, so it’s important to do your research and be ready for ups and downs. Stocks can be a good way to grow your money over time.
2. Money Market Mutual Funds (MMMF)
A money market mutual fund is a type of investment that pools money from many people to buy safe, short-term investments like government bonds or other secure assets.
These funds aim to give you a higher interest rate than a regular savings account while keeping your money safe. They usually allow you to withdraw money easily.
3. Money Market Accounts
A money market account is a savings account that often gives you a higher interest rate than a regular savings account. To open one, you usually need a higher minimum balance.
These accounts often let you write checks or use a debit card, giving you some easy access to your money while still earning interest.
4. Certificates of Deposit (CDs)
A certificate of deposit (CD) is a savings product offered by banks. You agree to keep your money in the CD for a set time, like six months or a few years. In return, the bank pays you a higher interest rate than a regular savings account.
The downside is that you can’t take your money out without a penalty until the time is up.
5. Treasury Notes
Treasury notes are loans you give to the government. When you buy a Treasury note, you lend money to the government for a fixed time, usually two to ten years.
In return, the government pays you interest every six months. These notes are very safe because they’re backed by the government, making them a low-risk way to save money.
6. Treasury Bonds
Treasury bonds are long-term loans you give to the government. When you buy a Treasury bond, you agree to lend the government money for 20 to 30 years.
Then, the government pays you interest every six months. Because these bonds are backed by the government, they are very safe. They can help you earn a steady income over a long time.
7. Treasury Bills
Treasury bills, or T-bills, are short-term loans to the government that you buy for a period of a few days to one year. You buy them at a price lower than their value, and when they mature, you get the full value.
The difference is your earnings. T-bills are safe and are a good option if you want to save for a short time.
8. FDIC-Insured Sweep Accounts
An FDIC-insured sweep account is a special type of bank account. When you have extra money in your checking account, the bank automatically “sweeps” that money into a high-interest savings account or other safe investments.
Your money stays insured by the FDIC up to $250,000, which protects it. This way, you can earn more interest while still having quick access to your funds.
9. Corporate Bonds
Corporate bonds are loans you give to companies. When you buy a corporate bond, you lend money to a company for a fixed time, usually from one to ten years.
The company pays you interest, and at the end of the term, you get your money back. Corporate bonds can offer higher interest rates than government bonds but come with more risk since companies can face financial problems.
10. Short-Term Bond Funds
Short-term bond funds are investment funds that buy a variety of short-term bonds. These bonds usually mature in one to three years. Because the fund holds different bonds, it can spread out risk.
Short-term bond funds can offer better returns than regular savings accounts while keeping your money relatively safe. They also allow you to sell your shares easily if you need cash.
Each option offers different benefits, helping you grow your money over time. Remember to do your research and choose what feels best for you.
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Nancy Maffia
Nancy received a bachelor’s in biology from Elmira College and a master’s degree in horticulture and communications from the University of Kentucky. Worked in plant taxonomy at the University of Florida and the L. H. Bailey Hortorium at Cornell University, and wrote and edited gardening books at Rodale Press in Emmaus, PA. Her interests are plant identification, gardening, hiking, and reading.
