I know the best thing to do with that kind of money is to put it in a bank, but a savings doesn't give enough interest as to where a "CD" does. I'm not sure to put this in a College Fund or use a CD. Cause I know I won't ever be using this kind of money. What is the best solution for me?
2007-07-25 09:25:40 · 12 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
You're a little too young for that much money. You better send it to me and let me hold it for you, ok?
2007-07-25 09:28:19 · answer #1 · answered by Anonymous · 1⤊ 3⤋
Cds are a good choice if a little (ok a lot) on the conservative side. Savings bonds aren't much better interest wise and tie your money up for a long time (20 years).
One thing you might want to think about is what I call a rotating CD. Take 1/2 of the money and sink it into a 6-month CD and the other 1/2 into a 1-year CD. When the 6-month CD matures, re-invest it into a 1-year CD. As each of those mature, re-invest them back into 1-year CDs.
This way you'll only be at most 6-months from being able to get your hands on some of the money (in case of emergency) and you'll get better interest rates than simply putting your money into savings.
Good luck.
2007-07-25 17:15:37 · answer #2 · answered by Dave T 4 · 0⤊ 0⤋
Do not put your money in a CD. Especially a Cd less than 1year as the interest will not compound. Plus a CD will only pay a rate of about 5.40% if you are lucky. You need to take the funds and open account with a company like Sharebuilder.com. Once the account is open buy 5 Dividend paying stocks. (Ex. SO, APRO, ECOL) Some stocks will pay 5% to 10% a year just in dividens plus what ever the stock goes up in value. Make sure you reinvest the dividens. A company like sharebuilder will allow you to add to your account at any time and even buy partial shares if you dont have enough to buy a whole share. " The power of compounding " When you turn 21 you will have alot more money.
2007-07-25 17:49:52 · answer #3 · answered by tropical27 2 · 0⤊ 0⤋
Put it in a savings account that will allow you to withdraw for college expenses. If you put it in a savings account at 4% (you can probably do better than that but just suppose) when you're 18 in 2 years it will have accrued ~$400 interest or at 21 in 5 years more than a $1000. A CD will give you evn more and government bonds have decents yeilds and the interest will not be taxable as capital gains. If you can find a two year CD at a good rate, go for it. You are making a very wise desicion to invest the money.
2007-07-25 16:48:53 · answer #4 · answered by Anonymous · 0⤊ 0⤋
CDs are good because you can choose the lenght of time you want to leave it in and it has a higher interest rate than regular savings accounts.
Usually, the shortest CD you can get is 6 months. The longest is like 5 years. Why don't you put it in a 6 month CD, and then when it comes due you can decide to take it out if you feel you need it. If you don't and you want to save it for college,put it in a 2 yr CD (then you will get it out when you're 18).
The longer the CD goes, the higher the interest rate will be. :)
Good thinking, girl!
2007-07-25 16:34:41 · answer #5 · answered by kermit 6 · 0⤊ 0⤋
Put it into a CD for 3 years and don't touch it. It'll grow. Make sure that you shop for the highest CD rate. Call a few banks in your area and ask them what their rates are for a 3-year CD. A mutual fund would be good too but that's for a longer term.
2007-07-25 16:31:48 · answer #6 · answered by gwenleonhard 3 · 1⤊ 0⤋
CDs are good investments. You might contact an investor and get some professional advice. Perhaps an investor could turn the $5,000 into $50,000 over a period of time.
Good thinking!
2007-07-25 16:28:59 · answer #7 · answered by Starla_C 7 · 0⤊ 0⤋
you probably dont need it trust me i was your age and blew the same amount in two months on nothing. theres all types of ways to pay for college. put it in a CD or something that gains interest and forget all about it,.......
2007-07-25 16:31:06 · answer #8 · answered by J W 1 · 1⤊ 0⤋
CD's are a good option. Pick a term that works well for you. That is what I would do.
2007-07-25 16:36:15 · answer #9 · answered by Willie J 5 · 0⤊ 0⤋
Do you p[lan to attend college? put it in a savings account, and it can be used for either college or a new car or for when you are ready to move out on your own. trust me you will be able to use it!!!!
2007-07-25 16:45:45 · answer #10 · answered by logonics_girl♥♥♥ 3 · 0⤊ 0⤋
give me a thousand, i am near homlessness.
Do what i want to do (but i got no money , and im 26), buy video equipment and start filming movies.
make money off of that.
2007-07-25 16:33:05 · answer #11 · answered by Aaron M 3 · 0⤊ 1⤋