FREE: DotComSecrets Book
The Underground Playbook For Growing Your Company Online

FREE: DotComSecrets Book
The Underground Playbook For Growing Your Company Online

Short Term Investment Options – 2019 Comprehensive Guide

Start a side hustle by Jan Tumbokon

Short Term Investment OptionsInvesting does not mean that you should only follow long term financial strategies. It is also possible to get returns on investment after a short period of time.

If you need your investment after a couple of months or a few years, there are different investment options available.

They can be a good option if your savings goal has a short deadline. This may be if you want to get enough cash for down payment of a house, pay off a high debt that cannot be accommodated with your current income or you just want to take your family for a trip.

Whatever your reasons are, you obviously would want to look for the best short term investment options that are available in the market today.

The best thing with short term investments is that they bear lower risks compared to long term investment options. Besides getting returns, your money will also be safe.

If you need cash in the next five years, investing in the stock market may not be a good option. This is because the time may not be enough to recover in case of a downturn.

For long term CDs, interest rates may increase and you may have to incur an interest penalty in case you withdraw the funds before the term ends. but a money market accounts can be a good option if you need cash in less than two years.

The risks associated with the account are few and although the interest rates are low, they are slightly higher when compared to transitional bank accounts.

Here is a comprehensive guide on the best short term investment options that you can consider…

Peer to peer lending

With peer to peer lending, investors are connected to qualified customers who require a loan. In this case, the investors can offer a certain percentage of the loan that the borrower requires.

The investors purchase notes and get monthly income that is inclusive of the loan repayment plus the interest. This option comes with benefits for both parties.

The borrowers get the funds they need, and the investors earn interest out of the cash they loan out. The interest rates on notes are usually based on specific criteria.

Only qualified borrowers are accepted, which means that there are fewer risks involved for the lenders.

The lenders may start giving the cash in small amounts, but the amount can increase once they gain confidence with a peer to peer lending company. Since they are available online, these services are quite cheaper and borrowers can also get funds fast when compared to traditional financing institutions.

You also have a chance of earning high returns. Your investment will depend on your investment timeline and the risk level that you are comfortable with, because there are also risks of borrowers defaulting.

Online savings accounts

Online savings accounts can be a good option for those who want low risk. This is because the accounts are safe and with high yield savings accounts, the interest rates are usually higher.

There are some high yield savings accounts that offer more than 2% interest and can be the best alternative for investors who want high returns with low risks involved.

Some of the benefits of online savings accounts include:

Guarantee

If your deposit is below the FDIC coverage, you won’t have to worry about losing your principle. All you need to do is deposit the cash, and wait for it to grow.

Low risks

Most online savings accounts offer low rates, but there are usually low risks involved.

High liquidity

Some banks allow investors to make up to six withdrawals per month. This means that you can easily get your money when you need with fewer expenses involved.

Money market accounts

The APY of money market accounts are almost the same as one year CDs.

The main benefit of money market accounts is that you can have immediate access to your cash.

Depositors are provided with ATM cards, deposit slips and checks. The accounts bear low risks and there is also the potential of earning high returns. All you need to do is shop around for a bank that offers the best rates.

Certificate of deposits

When it comes to certificate of deposits, banks tend to offer varied terms. The term can range from a few months up to five years.

How long your want to invest and your timeline are some of the things that determine the length of CDs that can work best for you.

With a certificate of deposit, you can invest money for a specific time period. You can get higher yields when the term of investment is long. It is also possible to receive monthly interest if you request so during application. But most investors leave their interest to accrue.

It is however important to note that you will have to incur a fee if you decide to withdraw funds before maturity. This fee can be up to 3 months worth of your interest amount and it can greatly reduce your earnings.

Cash back rewards

Cash back rewards can be a good option for those who want to earn easy money within a short time period. For instance, you can sign up for a rewards card and get a sign up bonus.

A Chase Sapphire Preferred card for instance offer 50000 points that is worth at $500 after you use the card for 90 days and use at least $4,000. Another benefit is that the cards annual fee is waived every year.

All you need to do is meet the minimum spending requirements to benefit from this option. It is also important to pay your bills on time to avoid paying high interest.

Roth IRA

It is also possible for a retirement account to become a short term investment account. Roth is usually funded with after tax income, and it is possible to withdraw your contribution at any time.

By the way, not saving for retirement can cost you a lot in future, which is important that you start funding your retirement account as soon as possible.

If you use Roth IRA as a short term investment option, it is possible for you to withdraw the funds and you can also get high rate of return form this investment.

It can be a great choice for investors who want to get high returns and also want the freedom withdraw their contribution when they need it.

Online checking accounts

An online checking account can also become your short term investment. There are also many benefits that come with the account like high liquidity considering that you can make as many withdrawals as you want.

Interest rate is also not charged since the money will be stored in a checking account, and not a savings account.

The only disadvantage of online checking accounts is that they have low interest rates compared to other short term investment options.

The benefits of having a checking account include:

Guarantee

So long as your deposit is below the $250,000 FDIC coverage, you won’t lose your principal.

Risk free returns

As much as the returns are low, there are also minimal risks involved with the account

High liquidity

You can withdraw funds via transfers, ATM cards, debit card and there are no limitations on withdrawals

Hassle free investment

The process of opening an online checking account is simple and straightforward. It also takes a short term to open the account.

 

Short term bond funds and ETFs

It is only a professional financial advisor that can well manage short term bond funds.

You can earn high yields from bonds, but compared to money market accounts, they are not as stable. The bonds pay out depends on the current market conditions, which means that the monthly payments fluctuate.

The bonds have a maturity period of less than two years and can work well for investors who are comfortable with this timeline. To trade bond funds are ETFs, you need to have a brokerage account.

5-year treasury inflated protected securities

Treasury inflated securities. Or simple referred to as tips are government bond which are indexed to inflation. Tips have fixed interest rates but the value of security usually rises with inflation.

An investor may get only 0.5% as semiannual interest, bond the bond value can increase up to 2.5% per year over a period of five years. TIPS can be bought directly from the government.

It is also important to know that the interest rates are taxable.

Municipal bonds and corporate bonds

Compared to tips, municipal bonds are quite risky. The main risk in this investment is interest rate risk.

If the rate increases in a low interest rate environment, the bond value decreases. But the decrease can only have an impact of you decide to sell the bond before maturity.

Investors get 100% of their initial investment, including an interest rate if the bond is held to maturity. Compare to treasury and municipal bonds, corporate bonds bear high risks.

This is because these bonds are not backed by any government. But as usual, increased risks also means high returns on investment.

Pay off high interest debt

If you want a high return on investment, it is also important that you pay off high interest debts.

If you pay off high interest personal loans, credit card debts and other expensive debts that you have, the returns you get are equal to interest rates that you would otherwise be charged if you happen to pay off these debts after the due dates.

For instance you pay a credit card debt of $2000 that has an interest rate of 13 percent; you will end up saving up to $900 that you would have paid as interest.

The benefits of short term investments

With any type of investment, there are always benefits and drawbacks involved. All the short term investment options listed above comes with benefits, but they also have their share of drawbacks.

One of the main advantages of short term investment options is that your principle is retained. Apart from short term bonds, you won’t lose your principle with all the remaining options.

This is actually one of the top advantages of these options, making them attractive to investors. They can also come in handy when you need an investment that offers quick access to your cash.

You can invest your $5000 knowing that you will always have the $5000 back, with or without interest. The only disadvantage of these options is that most of them have low rates of return.

Interest rates have increased in the past few years, but these rates are still low when it comes to historic standards.

The low rates have helped people save a lot on student loan and mortgage refinance, but they also have one disadvantage.

The cash stored in safe places like money market accounts, savings accounts and CDs earn low interests, and especially in conventional financial institutions.

If you need the money in a period of less than five years, the interest rate can be between 1.-5 percent depending on the type of investment, but they can be a good option if you need the cash in a limited period of time. Besides, these accounts also have lower risks.

Now I’d Like To Hear From You

Chat With Us

There you have it…
If you are looking for more short term investment options, there are quite a number of options available.

With the advancements in technology, there are many online platforms that offer these options. What you need to know is that there is a big difference between short term and long term investments, and especially when it comes to returns.

If you need your money back after a short time period, consider an investment that is highly liquid and charges less withdrawal fees.

You should equally avoid risky investments. If for instance you need the cash in less than five years, you should avoid taking high risks. It is actually better to accept the low interests on such an investment.

What other methods or techniques that you use to increase your net worth?

SiteGround
SiteGround

Short Term Investment Options – 2019 Comprehensive Guide

Start a side hustle by Jan Tumbokon

Short Term Investment OptionsInvesting does not mean that you should only follow long term financial strategies. It is also possible to get returns on investment after a short period of time.

If you need your investment after a couple of months or a few years, there are different investment options available.

They can be a good option if your savings goal has a short deadline. This may be if you want to get enough cash for down payment of a house, pay off a high debt that cannot be accommodated with your current income or you just want to take your family for a trip.

Whatever your reasons are, you obviously would want to look for the best short term investment options that are available in the market today.

The best thing with short term investments is that they bear lower risks compared to long term investment options. Besides getting returns, your money will also be safe.

If you need cash in the next five years, investing in the stock market may not be a good option. This is because the time may not be enough to recover in case of a downturn.

For long term CDs, interest rates may increase and you may have to incur an interest penalty in case you withdraw the funds before the term ends. but a money market accounts can be a good option if you need cash in less than two years.

The risks associated with the account are few and although the interest rates are low, they are slightly higher when compared to transitional bank accounts.

Here is a comprehensive guide on the best short term investment options that you can consider…

Peer to peer lending

With peer to peer lending, investors are connected to qualified customers who require a loan. In this case, the investors can offer a certain percentage of the loan that the borrower requires.

The investors purchase notes and get monthly income that is inclusive of the loan repayment plus the interest. This option comes with benefits for both parties.

The borrowers get the funds they need, and the investors earn interest out of the cash they loan out. The interest rates on notes are usually based on specific criteria.

Only qualified borrowers are accepted, which means that there are fewer risks involved for the lenders.

The lenders may start giving the cash in small amounts, but the amount can increase once they gain confidence with a peer to peer lending company. Since they are available online, these services are quite cheaper and borrowers can also get funds fast when compared to traditional financing institutions.

You also have a chance of earning high returns. Your investment will depend on your investment timeline and the risk level that you are comfortable with, because there are also risks of borrowers defaulting.

Online savings accounts

Online savings accounts can be a good option for those who want low risk. This is because the accounts are safe and with high yield savings accounts, the interest rates are usually higher.

There are some high yield savings accounts that offer more than 2% interest and can be the best alternative for investors who want high returns with low risks involved.

Some of the benefits of online savings accounts include:

Guarantee

If your deposit is below the FDIC coverage, you won’t have to worry about losing your principle. All you need to do is deposit the cash, and wait for it to grow.

Low risks

Most online savings accounts offer low rates, but there are usually low risks involved.

High liquidity

Some banks allow investors to make up to six withdrawals per month. This means that you can easily get your money when you need with fewer expenses involved.

Money market accounts

The APY of money market accounts are almost the same as one year CDs.

The main benefit of money market accounts is that you can have immediate access to your cash.

Depositors are provided with ATM cards, deposit slips and checks. The accounts bear low risks and there is also the potential of earning high returns. All you need to do is shop around for a bank that offers the best rates.

Certificate of deposits

When it comes to certificate of deposits, banks tend to offer varied terms. The term can range from a few months up to five years.

How long your want to invest and your timeline are some of the things that determine the length of CDs that can work best for you.

With a certificate of deposit, you can invest money for a specific time period. You can get higher yields when the term of investment is long. It is also possible to receive monthly interest if you request so during application. But most investors leave their interest to accrue.

It is however important to note that you will have to incur a fee if you decide to withdraw funds before maturity. This fee can be up to 3 months worth of your interest amount and it can greatly reduce your earnings.

Cash back rewards

Cash back rewards can be a good option for those who want to earn easy money within a short time period. For instance, you can sign up for a rewards card and get a sign up bonus.

A Chase Sapphire Preferred card for instance offer 50000 points that is worth at $500 after you use the card for 90 days and use at least $4,000. Another benefit is that the cards annual fee is waived every year.

All you need to do is meet the minimum spending requirements to benefit from this option. It is also important to pay your bills on time to avoid paying high interest.

Roth IRA

It is also possible for a retirement account to become a short term investment account. Roth is usually funded with after tax income, and it is possible to withdraw your contribution at any time.

By the way, not saving for retirement can cost you a lot in future, which is important that you start funding your retirement account as soon as possible.

If you use Roth IRA as a short term investment option, it is possible for you to withdraw the funds and you can also get high rate of return form this investment.

It can be a great choice for investors who want to get high returns and also want the freedom withdraw their contribution when they need it.

Online checking accounts

An online checking account can also become your short term investment. There are also many benefits that come with the account like high liquidity considering that you can make as many withdrawals as you want.

Interest rate is also not charged since the money will be stored in a checking account, and not a savings account.

The only disadvantage of online checking accounts is that they have low interest rates compared to other short term investment options.

The benefits of having a checking account include:

Guarantee

So long as your deposit is below the $250,000 FDIC coverage, you won’t lose your principal.

Risk free returns

As much as the returns are low, there are also minimal risks involved with the account

High liquidity

You can withdraw funds via transfers, ATM cards, debit card and there are no limitations on withdrawals

Hassle free investment

The process of opening an online checking account is simple and straightforward. It also takes a short term to open the account.

 

Short term bond funds and ETFs

It is only a professional financial advisor that can well manage short term bond funds.

You can earn high yields from bonds, but compared to money market accounts, they are not as stable. The bonds pay out depends on the current market conditions, which means that the monthly payments fluctuate.

The bonds have a maturity period of less than two years and can work well for investors who are comfortable with this timeline. To trade bond funds are ETFs, you need to have a brokerage account.

5-year treasury inflated protected securities

Treasury inflated securities. Or simple referred to as tips are government bond which are indexed to inflation. Tips have fixed interest rates but the value of security usually rises with inflation.

An investor may get only 0.5% as semiannual interest, bond the bond value can increase up to 2.5% per year over a period of five years. TIPS can be bought directly from the government.

It is also important to know that the interest rates are taxable.

Municipal bonds and corporate bonds

Compared to tips, municipal bonds are quite risky. The main risk in this investment is interest rate risk.

If the rate increases in a low interest rate environment, the bond value decreases. But the decrease can only have an impact of you decide to sell the bond before maturity.

Investors get 100% of their initial investment, including an interest rate if the bond is held to maturity. Compare to treasury and municipal bonds, corporate bonds bear high risks.

This is because these bonds are not backed by any government. But as usual, increased risks also means high returns on investment.

Pay off high interest debt

If you want a high return on investment, it is also important that you pay off high interest debts.

If you pay off high interest personal loans, credit card debts and other expensive debts that you have, the returns you get are equal to interest rates that you would otherwise be charged if you happen to pay off these debts after the due dates.

For instance you pay a credit card debt of $2000 that has an interest rate of 13 percent; you will end up saving up to $900 that you would have paid as interest.

The benefits of short term investments

With any type of investment, there are always benefits and drawbacks involved. All the short term investment options listed above comes with benefits, but they also have their share of drawbacks.

One of the main advantages of short term investment options is that your principle is retained. Apart from short term bonds, you won’t lose your principle with all the remaining options.

This is actually one of the top advantages of these options, making them attractive to investors. They can also come in handy when you need an investment that offers quick access to your cash.

You can invest your $5000 knowing that you will always have the $5000 back, with or without interest. The only disadvantage of these options is that most of them have low rates of return.

Interest rates have increased in the past few years, but these rates are still low when it comes to historic standards.

The low rates have helped people save a lot on student loan and mortgage refinance, but they also have one disadvantage.

The cash stored in safe places like money market accounts, savings accounts and CDs earn low interests, and especially in conventional financial institutions.

If you need the money in a period of less than five years, the interest rate can be between 1.-5 percent depending on the type of investment, but they can be a good option if you need the cash in a limited period of time. Besides, these accounts also have lower risks.

Now I’d Like To Hear From You

Chat With Us

There you have it…
If you are looking for more short term investment options, there are quite a number of options available.

With the advancements in technology, there are many online platforms that offer these options. What you need to know is that there is a big difference between short term and long term investments, and especially when it comes to returns.

If you need your money back after a short time period, consider an investment that is highly liquid and charges less withdrawal fees.

You should equally avoid risky investments. If for instance you need the cash in less than five years, you should avoid taking high risks. It is actually better to accept the low interests on such an investment.

What other methods or techniques that you use to increase your net worth?

SiteGround
SiteGround

FREE: DotComSecrets Book
The Underground Playbook For Growing Your Company Online

Short Term Investment Options – 2019 Comprehensive Guide

Start a side hustle by Jan Tumbokon

Short Term Investment OptionsInvesting does not mean that you should only follow long term financial strategies. It is also possible to get returns on investment after a short period of time.

If you need your investment after a couple of months or a few years, there are different investment options available.

They can be a good option if your savings goal has a short deadline. This may be if you want to get enough cash for down payment of a house, pay off a high debt that cannot be accommodated with your current income or you just want to take your family for a trip.

Whatever your reasons are, you obviously would want to look for the best short term investment options that are available in the market today.

The best thing with short term investments is that they bear lower risks compared to long term investment options. Besides getting returns, your money will also be safe.

If you need cash in the next five years, investing in the stock market may not be a good option. This is because the time may not be enough to recover in case of a downturn.

For long term CDs, interest rates may increase and you may have to incur an interest penalty in case you withdraw the funds before the term ends. but a money market accounts can be a good option if you need cash in less than two years.

The risks associated with the account are few and although the interest rates are low, they are slightly higher when compared to transitional bank accounts.

Here is a comprehensive guide on the best short term investment options that you can consider…

Peer to peer lending

With peer to peer lending, investors are connected to qualified customers who require a loan. In this case, the investors can offer a certain percentage of the loan that the borrower requires.

The investors purchase notes and get monthly income that is inclusive of the loan repayment plus the interest. This option comes with benefits for both parties.

The borrowers get the funds they need, and the investors earn interest out of the cash they loan out. The interest rates on notes are usually based on specific criteria.

Only qualified borrowers are accepted, which means that there are fewer risks involved for the lenders.

The lenders may start giving the cash in small amounts, but the amount can increase once they gain confidence with a peer to peer lending company. Since they are available online, these services are quite cheaper and borrowers can also get funds fast when compared to traditional financing institutions.

You also have a chance of earning high returns. Your investment will depend on your investment timeline and the risk level that you are comfortable with, because there are also risks of borrowers defaulting.

Online savings accounts

Online savings accounts can be a good option for those who want low risk. This is because the accounts are safe and with high yield savings accounts, the interest rates are usually higher.

There are some high yield savings accounts that offer more than 2% interest and can be the best alternative for investors who want high returns with low risks involved.

Some of the benefits of online savings accounts include:

Guarantee

If your deposit is below the FDIC coverage, you won’t have to worry about losing your principle. All you need to do is deposit the cash, and wait for it to grow.

Low risks

Most online savings accounts offer low rates, but there are usually low risks involved.

High liquidity

Some banks allow investors to make up to six withdrawals per month. This means that you can easily get your money when you need with fewer expenses involved.

Money market accounts

The APY of money market accounts are almost the same as one year CDs.

The main benefit of money market accounts is that you can have immediate access to your cash.

Depositors are provided with ATM cards, deposit slips and checks. The accounts bear low risks and there is also the potential of earning high returns. All you need to do is shop around for a bank that offers the best rates.

Certificate of deposits

When it comes to certificate of deposits, banks tend to offer varied terms. The term can range from a few months up to five years.

How long your want to invest and your timeline are some of the things that determine the length of CDs that can work best for you.

With a certificate of deposit, you can invest money for a specific time period. You can get higher yields when the term of investment is long. It is also possible to receive monthly interest if you request so during application. But most investors leave their interest to accrue.

It is however important to note that you will have to incur a fee if you decide to withdraw funds before maturity. This fee can be up to 3 months worth of your interest amount and it can greatly reduce your earnings.

Cash back rewards

Cash back rewards can be a good option for those who want to earn easy money within a short time period. For instance, you can sign up for a rewards card and get a sign up bonus.

A Chase Sapphire Preferred card for instance offer 50000 points that is worth at $500 after you use the card for 90 days and use at least $4,000. Another benefit is that the cards annual fee is waived every year.

All you need to do is meet the minimum spending requirements to benefit from this option. It is also important to pay your bills on time to avoid paying high interest.

Roth IRA

It is also possible for a retirement account to become a short term investment account. Roth is usually funded with after tax income, and it is possible to withdraw your contribution at any time.

By the way, not saving for retirement can cost you a lot in future, which is important that you start funding your retirement account as soon as possible.

If you use Roth IRA as a short term investment option, it is possible for you to withdraw the funds and you can also get high rate of return form this investment.

It can be a great choice for investors who want to get high returns and also want the freedom withdraw their contribution when they need it.

Online checking accounts

An online checking account can also become your short term investment. There are also many benefits that come with the account like high liquidity considering that you can make as many withdrawals as you want.

Interest rate is also not charged since the money will be stored in a checking account, and not a savings account.

The only disadvantage of online checking accounts is that they have low interest rates compared to other short term investment options.

The benefits of having a checking account include:

Guarantee

So long as your deposit is below the $250,000 FDIC coverage, you won’t lose your principal.

Risk free returns

As much as the returns are low, there are also minimal risks involved with the account

High liquidity

You can withdraw funds via transfers, ATM cards, debit card and there are no limitations on withdrawals

Hassle free investment

The process of opening an online checking account is simple and straightforward. It also takes a short term to open the account.

 

Short term bond funds and ETFs

It is only a professional financial advisor that can well manage short term bond funds.

You can earn high yields from bonds, but compared to money market accounts, they are not as stable. The bonds pay out depends on the current market conditions, which means that the monthly payments fluctuate.

The bonds have a maturity period of less than two years and can work well for investors who are comfortable with this timeline. To trade bond funds are ETFs, you need to have a brokerage account.

5-year treasury inflated protected securities

Treasury inflated securities. Or simple referred to as tips are government bond which are indexed to inflation. Tips have fixed interest rates but the value of security usually rises with inflation.

An investor may get only 0.5% as semiannual interest, bond the bond value can increase up to 2.5% per year over a period of five years. TIPS can be bought directly from the government.

It is also important to know that the interest rates are taxable.

Municipal bonds and corporate bonds

Compared to tips, municipal bonds are quite risky. The main risk in this investment is interest rate risk.

If the rate increases in a low interest rate environment, the bond value decreases. But the decrease can only have an impact of you decide to sell the bond before maturity.

Investors get 100% of their initial investment, including an interest rate if the bond is held to maturity. Compare to treasury and municipal bonds, corporate bonds bear high risks.

This is because these bonds are not backed by any government. But as usual, increased risks also means high returns on investment.

Pay off high interest debt

If you want a high return on investment, it is also important that you pay off high interest debts.

If you pay off high interest personal loans, credit card debts and other expensive debts that you have, the returns you get are equal to interest rates that you would otherwise be charged if you happen to pay off these debts after the due dates.

For instance you pay a credit card debt of $2000 that has an interest rate of 13 percent; you will end up saving up to $900 that you would have paid as interest.

The benefits of short term investments

With any type of investment, there are always benefits and drawbacks involved. All the short term investment options listed above comes with benefits, but they also have their share of drawbacks.

One of the main advantages of short term investment options is that your principle is retained. Apart from short term bonds, you won’t lose your principle with all the remaining options.

This is actually one of the top advantages of these options, making them attractive to investors. They can also come in handy when you need an investment that offers quick access to your cash.

You can invest your $5000 knowing that you will always have the $5000 back, with or without interest. The only disadvantage of these options is that most of them have low rates of return.

Interest rates have increased in the past few years, but these rates are still low when it comes to historic standards.

The low rates have helped people save a lot on student loan and mortgage refinance, but they also have one disadvantage.

The cash stored in safe places like money market accounts, savings accounts and CDs earn low interests, and especially in conventional financial institutions.

If you need the money in a period of less than five years, the interest rate can be between 1.-5 percent depending on the type of investment, but they can be a good option if you need the cash in a limited period of time. Besides, these accounts also have lower risks.

Now I’d Like To Hear From You

Chat With Us

There you have it…
If you are looking for more short term investment options, there are quite a number of options available.

With the advancements in technology, there are many online platforms that offer these options. What you need to know is that there is a big difference between short term and long term investments, and especially when it comes to returns.

If you need your money back after a short time period, consider an investment that is highly liquid and charges less withdrawal fees.

You should equally avoid risky investments. If for instance you need the cash in less than five years, you should avoid taking high risks. It is actually better to accept the low interests on such an investment.

What other methods or techniques that you use to increase your net worth?