Short-term investment plans can be an excellent way to secure your savings and make some extra cash, but if you’re not careful, you can find yourself taking unnecessary risks and getting into financial trouble. To avoid potential problems with short-term investments, it’s important to keep certain tips in mind. Make sure you understand the risks involved with each investment opportunity before you take any action. Here are eight safe and lucrative short-term investment plans that you might have overlooked or forgotten about entirely!
Table of Contents
1) Treasuries
Treasuries are considered to be among the safest investments in America. Because of their safety, these bonds have low returns; however, they can be purchased as short-term investment plans —which means that if you don’t plan on holding them for too long, then Treasuries may be a worthwhile investment.
One caveat: watch out for inflation! An increase in inflation could mean a decrease in purchasing power (which is not good for those with short-term investments).
2) TIPS
Money market funds invest in debt securities such as certificates of deposit (CDs), commercial paper, Treasury bills, or short-term corporate bonds.
They are FDIC-insured up to 2,50,000 and can be a great choice for investors who want to protect their money from inflation but don’t want to tie it up for long periods. (Here is some more information on why you should put your money in a Money Market Fund)
3) CDs (Certificates of Deposit)
The best short-term investment plan you can make is a CD. CDs are FDIC-insured, meaning that even if your bank fails, you’ll never lose your principal.
The longer your term, usually up to 5 years, the more interest you’ll earn on any cash balance in your account. Some banks offer higher rates for accounts with higher balances, so it’s a good idea to shop around for better rates if you have extra money to invest.
4) Savings Bonds
If you’re looking for a safe, inexpensive place to put your money that also offers some interest, you can’t go wrong with U.S. savings bonds.
The minimum investment is just $50, but if you get them for your children as gifts or other special occasions—or even open a savings bond birthday club (where every month on their birthdays they receive a paper bond)—it’s an easy way to teach kids about saving money in an accessible, tangible way.
5) Money Market Mutual Funds
Money market mutual funds are designed to appeal to two types of investors—those who want a safe place to park their cash, as well as those who want a slightly riskier investment vehicle with some growth potential.
Money market funds invest in extremely low-risk assets, such as Treasury bills, commercial paper, and bonds.
6) I Bonds
In addition to having a range of terms, Series I Bonds also come with a variable interest rate.
Although they only offer a fixed interest rate for six months, these bonds offer one of the most competitive rates in today’s market. If you’re looking for short-term investments that are safe and won’t fluctuate too much over time, consider looking into I Bonds.
7) Treasury Bills (T-Bills)
Treasuries are debt instruments that many investors choose to avoid, but others love them because of their safety.
There’s no credit risk with treasuries—they are backed by the government, so even if they default (which has never happened), you get your principal back. In return for that stability, though, you receive a very small interest rate on your investment plans —typically a few tenths of one percent per year.
8) Credit Unions
The average annualised return for a credit union money market account is 1.35 percent as of June 30, according to Bankrate’s latest survey.
Still, many credit unions can pay between 2.25 percent and 3 percent annually on their money market accounts when CD rates aren’t particularly good (they make up for it with lower opening deposits). Credit unions can be especially attractive if you have no other options nearby or if your bank has repeatedly charged you overdraft fees.
The iSelect Guaranteed Future product is a great way to ensure that your family will be taken care of if something happens to you. It’s also really easy to understand and simple to use, which means that anyone can benefit from it no matter how much they know about insurance products. Plus, it’s extremely affordable so even if you’re on a tight budget, this is something that can fit into your family’s budget easily!
Conclusion
Investing in the stock market can be very rewarding and lucrative, but it’s often considered too risky for some or too difficult for others. However, there are plenty of short-term investment options out there that you may have overlooked that offer both profits and security with little risk of substantial loss. If you’re looking for an alternative to conventional stocks and bonds, try these eight safe and lucrative short-term investment plans as an alternative way to grow your money without putting your financial safety at risk.
