I am receiving a little over $3,000 in my refund. I already know I want to save it until I move from Boston to L.A. in Aug/Sept and use it for a downpayment on a car. But until then, is there anything I can do with it for a short term (6-7 months) that I can have it work for me? Ex: Safe investment, interest, etc.
2007-01-31 06:24:30 · 7 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
More on me: I'm graduating college in May. I will be moving to LA to do an internship and start my career. Will be looking to purchase my first car since High School.
2007-01-31 06:37:51 · update #1
Typically, I'd say "save your tax refunds," but I think a car purchase after you move is a good expense (assuming it's not a luxury car!).
Since you NEED the money in 6-7 months, you'll want to stick to a safe investment. A 6-month CD isn't going to pay well, but you won't lose it. At current rates, a 6-month $3000 CD might gain $150 of so. Not too bad. That could be almost a whole car payment.
If you have a car and could, if the bad happens, keep driving it, an index fund wouldn't be too bad. You do risk losing part of the $3000. But, if you leave the money there long enough, it's likely to come back up. Only do this if you're willing to forego the car for another year or more OR if you have another source of funds for it.
If you've never invested before, I'd say go with the CD and take your 5-5.5% interest.
2007-01-31 06:31:49 · answer #1 · answered by Jay 7 · 0⤊ 0⤋
You've been given quite abit of advice already, so I'll just co-sign on a few of the ideas given............a cd would be a great choice if you didn't need the money for awhile after your move. But since you will need the money to purchase a car, your best choice would be to find a bank in the sky, online bank, with great rates for savings accounts. I think someone suggested a bank with a physical location in CA. Or my suggestion would be ING Direct or HSBC. I'm new to both and have heard only good things about both.
2007-01-31 07:49:36 · answer #2 · answered by Laughing 4 · 0⤊ 0⤋
Even though you're moving away from us to go watch Nomar and Derek play for the Dodgers, most of the anwers above are correct.
Hit www.bankrate.com and you can run searches for CDs and savings accounts. I plugged 6-month CDs in and it gave me a list of banks, rates, min deposits, etc. According to BankRate, the best rate on a minimum $2000 6-month cd is from Imperial Capital Bank in LaJolla, CA giving 5.32% with an APY of 5.45%. IndyMac Bank in Pasadena, CA is right below that at 5.31%. You can also find e-banks with FDIC insured cds as well as ING, E*Trade Bank etc etc.
On MMA/Savings accounts, a search of the top 100 yields, the best offered is an intro rate of 5.84% but it's in Florida. UFBDirect.com in Irvine, CA offers a 5.19% MM rate with a $1 opening requirement. On looking at banks in Mass., the best bank that you can go to a physical branch is Eastern Bank with an intro rate of .85%, $2500 bal to avoid the $10 monthly fee. All the other banks that are listed above Eastern Bank look to be internet banks or the like. But these banks are carrying rates of 3.59% up to 5.16%.
If these banks in Cali allow you to open over the phone/fax, then you can put the money out there and have it waiting for you when you go to LA. Just make sure they have branches in the area you want to move to so you can access the money asap!!
2007-01-31 07:06:43 · answer #3 · answered by dougzinboston 4 · 1⤊ 0⤋
Hi -
Open an online savings account with HSBC:
http://www.us.hsbc.com/1/2/3/personal/savings/online-savings?code=M0116406DK
They are offering 6% APY through 4/30/07 (otherwise it's 5.05% - better than ING). I've been a customer of their online savings account for a year now and it's the best rate around at the moment with no minimum balance and access to your money fast if you need it.
Good luck!
2007-01-31 06:31:17 · answer #4 · answered by rapha76 3 · 1⤊ 0⤋
Two options, put it in an ING Direct savings account at 4.5% or AmBoy Direct at 5.25% and have instant access to it, OR put it in a 3 or 6 month CD to make just a little bit more money, but with a CD you cant get access to it until the term is over. (you might, but then you lose the money you would of earned to fees and taxes).
2007-01-31 06:27:17 · answer #5 · answered by Anonymous · 1⤊ 0⤋
buy a cd with ing direct, I heard they have the highest rates
2007-01-31 06:28:33 · answer #6 · answered by Anonymous · 1⤊ 0⤋
Take it to the Casino man. Play some blackjack and triple your money!
2007-01-31 06:48:24 · answer #7 · answered by Adam M 1 · 0⤊ 3⤋