Investing ideas?

Question

To begin, I'm only 15 years old, and I have around $800 in a savings account. I'm almost positive I won't be needing that money until next year for when I get a car (maintenance, gas money, emergencies), so I was wanting to put my money to work (a.k.a. invest). But I need to know, for me, what would be the best investment?

Should I get a CD?
How about some stocks?

My money is currently in a savings account drawing less than 1% interest, and since I won't be needing my cash for a year (approx.) then I thought I should do something with it.

Ideas would be very helpful!=]

Answer 1

ask at your bank if they have a better rate for a CD or a MoneyMarket type account
(but you might need 1000.00 minimum)

at your age stocks are not a good option for anything as close as a few months because the market "fluctuates" quite a bit over the short term, and I'll bet you would be very upset if your $800 turned into $650.00 in a few weeks

one nice thing about CD at your age is that it sort of locks your money away, you can get it but you have to pay a penalty so you won't be tempted to take out $100 for the latest haircut or something that you really don't need

My recommendation is the CD for maybe $600.00 and keep the other $200 in the regular account if you can do that without forfeiting for minimum balance below $250 or something bad like that

But keep in mind that the difference between 1% interest and 5% interest is only about $10.00 because you have a small balance (I know it seems big to you at your age, but compared to big bank accounts it is small) and only part of a year. It might not be worth the trouble for $10, but on the other hand it is a good learning experience to figure out how to do this and what the advantages are.

Good luck and Happy investing!

Answer 2

Check with the banks or credit unions in your area. hopefully there is one that will pay near 5% for an Certificate of deposit of 8-12 months. With a CD you can't touch the money until the # of months specified without paying an interest penalty.

You won't earn a large amount but it is better than 1%

They MAY offer a Money Market account which pays more interest without a specified term.

Answer 3

That's short term, look for a CD. Banks usually pay the lowest rates. Look for a Credit Union in you area and check their rates. Currently my Credit Union is paying 5% 1yr but theres a minimum, check out options in your area. Even though it may look like an employee C.U. you might get in just because you live in the county they service, all states are different.