Where is the best place to put aside money, with nor risk, while gaining interest (CD's, online savings acnt ?

Question

I'm only 16 by the way but im just wondering, and im wondering about places with no risk... so not stocks, etc... thanks.

Answer 1

Bad economy: tax free municiple bonds
Good economy: credit union savings account

Answer 2

Well, putting it in a savings account has extremely low risk, as deposits are guaranteed by the FDIC. I am not sure about online, though.

However, you need to know that risk and return go together. An extremely safe investment will only give you a little interest. A riskier investment will give you a higher return. Stocks do indeed carry more risk, but they give a higher return over the long run.

Much depends on what you are saving for. If it is to pay for college in a couple of years, low risk is appropriate, as the difference in return compounded over a couple of years will not be much.

But if you are saving for retirement, that should go into higher yield diversified investments. Otherwise you won't have very much when you are old & gray.
As you get closer to retirement shift the money into lower risk saving vehicles.
If you were saving for retirement and lost it all when you were 22, you would have time to replace your savings. But at 63 you would not.

Answer 3

What do you know about " on line" savings accounts and why do you presume they are safe? There is no such animal as a risk free investment. Check with all of the banks, see what their short term CDs are paying and put your money with the one who will pay you the best interest . After you amass a reasonable amount check out a good stock broker. Shares have given the investor the greatest return over the long haul.

Answer 4

Credit unions usually give better interest rates than banks, but CDs will pay more interest than any savings account. A money market account is just another type of savings account.

I recommend opening an account at a credit union. These used to be reserved for people who had a particular affiliation, i.e. telephone workers, government workers, university workers, etc. However, I believe there are now more options available for joining. In Texas, my credit union allows anyone to join. There is a "membership" fee which my institution calls a prime share; for me it was $25. This fee stays in my account, but cannot be accessed.

Once your account has more than $1000 you can open a Certificate of Deposit account. These are often referred to as Time Deposits. The amount of interest paid is usually dependent on the length of deposit time, with longer time paying higher interest rates. Current rates at my credit union range from 4% for 3 months to 5.2% for 60 months.

The best way to set up multiple CDs is choosing one 12 month, one 24 month, and one 36 month, etc. so each year you can evaluate how much the CD is earning, and make changes if desired. Sometimes a financial institution is hesitant to offer good rates, but they need money for lending, so they offer short term CDs with much better rates than their regular term CDs. Different institutions offer widely varying rates, so don't hesitate to move your money when the CD matures if interest rates are much better elsewhere.

Answer 5

CD are always safe.
Another way of saving is just to spend less: buy a used car rather than a new one, shop consignment and thrift stores, don't smoke (I see that is costing nearly $7 a pack!!!) You are doing the right thing by starting young. It really makes a huge difference. Also, there is an excellent book, "The Millionaire Next Door".

The goal of the advertising machine is to make you think that owning more stuff will mean you will be happier. Once you realize that this is a fallacy it changes the way you think.

Answer 6

the only place to put money and gain interest with no risk is in a bank/credit union, but you'll only gain 3-4% on that investment. CD's are good for more than that usually, but you cannot touch the money until it matures without paying a fee. For long term growth look to some good mutual funds, they generally have growth when stocks are up and when stocks are down the loss isn't so much. Another good investment, but one in which you are not very liquid is in real estate, but since ur 16 u'd need some adult to sign with you/or for you.

Answer 7

try a local credit union - best rates with individuals with no credit - all banks are accesable online just be sure it says https - not 100% secure with https but you have some protection from bank- cd 13months or less as interest rate is very volitile - but not as volitile as the past banks screwed up bigtime for high risk loans which effected everthing- negative experience with ing direct don't recommend them- always good to have someone available to help you face to face if need be like a bank

Answer 8

Well, if you're talking no risk, I guess a savings account isn't too bad. I get 4.3% with my Oarnge savings account at Ingdirect.com.

Answer 9

credit unions if insured by ncua
banks if insured by fdic
***

Answer 10

credit unions... not banks.