Best short term investment options

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Keeping a portion of your portfolio in safe investments is a smart source of diversification. When volatility spikes and markets swoon, you’ll benefit from the stability provided by holding safe, highly liquid investment assets. Low price volatility and little chance of losing your principal investment are the hallmarks of safe investments. They typically have lower returns than riskier assets, but that’s for the best. Investors choose safe investments when they want to protect their capital. The Best Safe Investments of June 2023 Investment Type Safety Liquidity Treasury bills, notes and bonds High High Money market mutual funds High High Treasury Inflation-Protected Securities (TIPS) High High High-yield savings accounts High High Series I savings bonds High Low Certificates of deposit (CDs) High Low Investment-grade corporate bonds Moderate Moderate Treasury Bills, Notes and Bonds • Safety: High • Liquidity: High U.S. Treasury securities are considered to be about the safest investments on earth. That’s because they are backed by the full faith and credit of the U.S. government. Government bonds offer fixed terms and fixed interest rates. The market for Treasury bills, notes and bonds is larger and more liquid than any other. That means you won’t have any trouble selling Treasury securities if you need to cash out before they reach their full maturity date. Money Market Mutual Funds • Safety: High • Liquidity: High Money market mutual funds feature low costs and very hi...

• Share to Facebook • Share to Twitter • Share to Linkedin Sometimes you need somewhere to park your cash for a year or less. Perhaps you’re saving your money for a house, a wedding, or another financial goal. If you don’t want to tie your money up long-term, here are some of the best short-term investments right now. Highest Rate Savings Account Fitness Bank’s website says you can meet these requirements by swimming or cycling, but it’s not clear how much cycling or swimming you need to do or how it counts towards your step goal. If you don’t meet the 12,500 steps, your savings account rate will earn 1.25% APY. If you don’t want to track your steps, UFB Direct has a savings account offering 3.11% APY with no minimum balance and no fees (and no step count). Highest Rate Money Market Account Money Market accounts, at least traditionally, offer higher interest rates than savings accounts. This isn’t necessarily true right now, but money market accounts do have the advantage of providing check-writing privileges, and some come with a debit card. If you don’t make a lot of withdrawals, they pay better rates than Highest 1-Year CD If you want a 12-month CD, Merrick Bank has a great rate at 3.90% APY with a $25,000 minimum deposit. If you don’t want to tie up that much cash, CFG Bank has a 1-Year fixed CD with an APY of 3.82% and only a $500 minimum deposit. 1-Year Brokered CD (4.15% at Fidelity) A brokered CD is similar to a bank CD, only it’s offered through a brokerage. Unlik...

Arielle O’Shea leads the investing and taxes team at NerdWallet. She has covered personal finance and investing for over 15 years, and was a senior writer and spokesperson at NerdWallet before becoming an assigning editor. Previously, she was a researcher and reporter for leading personal finance journalist and author Jean Chatzky, a role that included developing financial education programs, interviewing subject matter experts and helping to produce television and radio segments. Arielle has appeared on the "Today" show, NBC News and ABC's "World News Tonight," and has been quoted in national publications including The New York Times, MarketWatch and Bloomberg News. She is based in Charlottesville, Virginia. Money you need soon generally shouldn’t be in the stock market. Money you’re investing long term — such as for retirement — probably shouldn’t be in a plain old savings account. Why? Because despite a string of rate hikes from the Federal Reserve in 2022 and 2023, the average rate of return for savings accounts is still quite low compared to that of the stock market. So before you decide on a short- or long-term investment, think about what you’re investing for and how liquid — or accessible — you need your cash to be. A timeline can help. Are you looking for a safe way to invest your money for one year or less? You should likely stick to high-yield bank offerings, such as savings accounts or certificates of deposit. Are you banking money for a dream trip to Tahiti fo...

There’s no one-size-fits-all approach for meeting your investing goals. A strategy that works for retirement savings could be a poor fit for a home down payment or your emergency fund. Let’s take a look at some basic investing strategies for short-, medium- and long-term goals. It’s all a matter of balancing your tolerance for risk, the returns you expect and your liquidity needs. Best Investments for Short-Term Goals Short-term investing goals have a time horizon of one year or less. They include things like a security deposit for your next apartment or an With short-term goals, your aim should be a low level of risk and a high level of security. You don’t want to lose any money when you need to sell an investment to get your cash. And that’s the big idea behind Stability comes at a cost, though. You’re not going to earn much of a profit. Low returns are the flip side of the low-risk coin—that’s why you can have confidence you’ll have all of the money you need when you need it. Savings Accounts • Average annual percentage yield ( • Advantages: High liquidity, low risk, deposit insurance • Disadvantages: Low rates of return, potential limit of six withdrawals a month Savings accounts are the perfect parking lot for cash you need and can’t afford to lose. They’re available at With brick-and-mortar banks, you’re looking at a pretty low rate of return. The Federal Deposit Insurance Corp. (FDIC) clocks the current Neither average return is nearly high enough to fend off Cash M...

What are cash investments? Cash investments are very short-term investments that tend to be more stable than stocks or bonds. They aim to provide a low-risk option that keeps your money accessible—while you earn a little income for your savings goals. Cash investments include money market funds, CDs (certificates of deposit), and more. Vanguard money market funds Our money market funds invest in cash, cash equivalents, and high-quality, short-term debt securities. They also: • May be appropriate for money you'll need within the next 3 to 12 months, unexpected expenses, or goals without time frames. • Most funds allow you to access your money without penalty. • Focus on maintaining a stable share price. • Have a $3,000 minimum investment requirement. Brokered CDs Banks and credit unions issue CDs to investment firms at a premium interest rate in return for a lump-sum deposit. If you're considering investing in a CD, note they: • May be appropriate for money you'll need in 3 months to 3 years or short-term investment goals with set goal dates. • Are FDIC-insured for up to $250,000 per account owner for each ownership category at each institution. • Offer maturities that vary from a few weeks to several years. • Have a minimum investment requirement of $1,000. The Vanguard Cash Plus Account Our Cash Plus Account is an alternative to a traditional savings account. Please note that eligibility rules apply. The Cash Plus Account: • May be appropriate for emergency savings, retir...