What's the best return on $10,000? CD's, Mutual Fund, Savings account?.......?

Question

My wife and I are trying to save up for a house downpayment. We have a meager 10k, and want to get the most out of it for the next 1-2 years before we'd like to buy. Where will our hard earned money grow best?

Answer 1

Consider the Vanguard Prime Money Market Fund with a current yield of ~5.09% APR.
https://flagship.vanguard.com/VGApp/hnw/FundsSnapshot?FundId=0030&FundIntExt=INT
If you are in a high tax bracket you may prefer their tax exempt money market funds:
https://flagship.vanguard.com/VGApp/hnw/FundsByType
Sometimes other institutions will have a higher teaser rate, but Vanguard tends to have the highest yields I've found over the long run. (Vanguard money markets are not FDIC insured, however.)

Article on teaser rates:
http://www.marketwatch.com/news/story/banks-advertised-rates-dont-always/story.aspx?guid=%7B0A13B6E2-FFB2-4E2B-BD42-E2D1E01C52E5%7D

ING and HSBC often have rates close to Vanguard, and most of their products are FDIC insured. Bankrate.com provides links to CD's with high interest rates. You can check these at the following links:
http://home.ingdirect.com/
http://www.us.hsbc.com/1/2/3/personal/savings?code=husa
http://www.bankrate.com/

(If you are investing for a long period of time and are willing to accept some volatility, you should consider putting some money into no-load low expense mutual funds. These are not guaranteed, but over the long run produce much higher returns. However, for a short term investment of 1-2 years you risk losing money in this sort of investment.)


I hope you find these sites useful.

Answer 2

In the right fund, I think you can turn that ten thousand into twelve or thirteen or more in two years. Excelsior Value & Restructuring (Symbol: UMBIX) has clobbered the S&P 500 index for the last 1, 3 & 5 year periods. It's annual rate of return for the last five years is 23%, and it is up for the year to date 17%. In contrast, the S&P is up for the year 5.25%, or not a lot more than the best CD and money market rates.

But there is risk of loss. If you absolutely can't tolerate any risk, I would look for the best money market and CD rates at banks. Right now, they're probably between 4.5 and 5. If the CD is more than a quarter percent higher than money market, you may want to lock in, but the money is locked up for the term and you pay an interest penalty if you cash out early. The money market rate fluctuates, and if it looks like rates are headed down, you can always lock into a CD then. Under NO circumstances should you put it in a regular bank account. You'll earn next to nothing.

Answer 3

I'd go with the CD. You can dictate the term of it better than a mutual fund, and it will gain WAY more interest than a savings account.

Answer 4

short term, I'd say Gold, or the like. Troubled economy ahead, people flock to metals, supply and demand takes over, and it's secure as well. Take a look at the last two years performance and I think you'll see it matches saftey and performance for the next couple years (2). Beyond that, who knows.

Answer 5

Go with a CD, many banks will run specials that have a better APY for a short term. When it matures, go with the next best rate, and so on.

Answer 6

Mutual fund has the highest returns and maximum risk.

Savings account has highest security and minimum returns.

Answer 7

Visit your current bank and ask their new account specialist to see what their rates are for the above mentioned types of accounts. Or if you have a financial specialist from your jobs, he or she may be able to direct to the right kind of account.

Answer 8

-turn them all into copper pennies, I heard that they are going to be worth triple in a few years, because the Canadian mint is going to eliminate the copper penny this year,..,
good luck,.., bye,..,

Answer 9

IN this market I would do my own research, seriously.