saving money?
i currently go 2 school full time, and i work about 20 hrs a week. i want to put away a small amount of money every month and save it, however a savings account, and those ing and emigrant banking interest loans are just too small for the amount of money im putting in. What kind of investment would give me a decent return?
Public Comments
- If you are serious about saving, wait until you have a minimum of $500 and then open a CD (Cash Deposit) account. The interest rate is higher, but you will need to leave the money in the account for up to several years. Once you have saved enough money this way, you can begin buying savings bonds which generally pay an even higher rate.
- You could try a mutual or managed fund, but to open an investment with them you need a minimum of $1500 to $2000. However, after that you can contribute $100 a month minimum per month by direct debit from your bank account. This would be the best product for you, in my opinion, although getting the initial funds together will take some time. If you can save $20 a week, that's $1000 a year. I suggest you go to your bank and open an ordinary passbook account or something like it, that's hard to touch. Try online to find the best interest rate on a bank account you can get. Then, just go to your employer and have them directly transfer part of your wage into that account, and the rest of your wage into your normal account. That way, you don't need to think about your saving, because it just happens automatically. When you get a few hundred, put it in a term deposit for a few months. That way, savings you have sitting there will earn better interest. Every hundred you get, put on term deposit for six months, then start again on the next block. It's like building a house one brick at a time. Because you're starting small, you need to save a couple of thousand before you can really take advantage of some better investment products. Mutual or managed funds are great because they allow you good exposure to a wide range of asset classes, which, because you don't have a great deal to work with, you otherwise couldn't afford to invest in. If you're a United States citizen, go to morningstar.com, which is a website with good information about mutual or managed funds. You can also try going to your local bank where you have an account and seeing if they have a financial adviser, because some banks offer them as a free service. They can give you some great advice. Go to your library and get a few books out on personal finance. They're a great place to start. I'd start with term deposits until you get a couple of thousand, and then invest in a managed/mutual fund. Then, you will see some decent returns on your money. Best wishes
- You won't find a decent return with a small amount of money, and it will cost you more in fees and commissions to invest in the market. Your best bet is to open a savings account, like the ones you mentioned, even though you will be getting a small amount in interest. You have to start somewhere. Like the other person said, once you get a reasonable amount of money, say $250 to $500, you could get a CD, which is a certificate of deposit not a cash deposit account. You would be penalized if you withdrew the money prior to the maturity date. And higher rates by getting savings bonds? Don't think so...
- If you are looking for a guaranteed return you are in for a tough market. Online savings accounts were yielding 5% + just over a year ago, but now they are lucky to yield 3.5%. You could invest in an index mutual fund, but there is significant risk of losing a portion of your investment in the current market. Then again, with prices low you could make some decent gains when things turn around - and they will turn around, over the long term. Frugal Dad http://frugaldad.com
