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  • Writer's pictureMichelle Alexander

If You're Not Quite Ready to Invest-Here Are a Few Safe Options

Where Can I Harbor My Hard-Earned Funds?

No matter how much someone tells you it is better to invest in the market because the rate of return is higher and you'll get where you want to go faster financially; if you do not feel safe to invest, then you are just not ready. Well, what can you do in the meantime or what can you do that may work for you now? If you could dip your toe in before going all in; would you be willing to move in a safer direction until you feel ready to move to the next level? If so, here are three safer options that can offer returns, though not large, while you take time to get a feel for investing without heavy risk.


Savings Account

For immediate access to small cash shortages, you can open a regular savings account. Though this option does not offer a real return on your investment, it is safe. There are a few online banks that may offer a bit higher interest rate than the brick-and-mortars, but the percentage is still pretty low. You will also need to inquire what is or if there is a minimum deposit required to open an account at your chosen location. This option provides safety in that most savings accounts are government insured and this is a better way to hold on to your cash rather than keeping large sums in your home or carrying it around as was done way back in the real old time days.

Money Market Account (MMAs)

Another safe place to save/invest is in money market accounts which can be opened at most banks or credit unions. The interest rates on these accounts are normally higher than regular savings, but you may need larger sums of money to open. The minimum amount to open varies by institution, so you will also want to review the rules before you open the account. Be aware of minimum to open, minimum to earn interest, and minimum balances to avoid fees as well as penalties on excessive withdrawals. Whether the account is a savings or checking MMA account, not all are federally guaranteed so be sure to read the fine print and ask questions.

Certificates of Deposit (CDs)

Certificates of Deposit are a great option for short or mid-term goals as they offer even higher interest rates and can offer shorter maturity time frames. You can find this saving/investing option also at most banks and credit unions and with terms as short as 2 1/2- years or as long as 5-years before maturing while you earn interest or dividends. To the reap the best benefit, you will want to ensure that the interest is compounding and not simple. The longer the money stays in the fund, the higher the interest rate will be. If you find that you do not need the funds at maturity, you can always rollover for the same time period or switch to a longer period to reap higher interest amounts. You should make sure you are opening a CD at a bank or credit union for the federal guarantee that is discussed further below. Again, be sure to read the fine print on the maturity dates, annual yield, and rollover options.


Above are just a few safe options for those looking to safely save and invest for the short and mid-term without having to invest in an arena that may be scary for you. These options are safe, as they are usually guaranteed by the FDIC (Federal Deposit Insurance Corporation) as are most bank and credit union accounts. Although these options may offer lower returns, it is still better than not saving at all or not investing over time with compounding interest to earn a bit of return on your investment. Remember; the most important thing to do before you sign any papers, is to ask questions until you feel comfortable with your financial transaction so you are fully aware of any action that could cause penalties and you lose money.

Happy Saving!

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