Do you have liquid assets you want to see grow? Short-term investments might be exactly what you’re looking for. A short-term investment is a temporary investment that can be easily converted to cash. These investments are typically stored between 6 months to 5 years. The end goal of this type of investment is to gain more money quickly mostly through a passive income.
MONEY MARKET FUNDS
Money market mutual funds are a type of mutual fund that invests in low-risk and short-term debt securities. This is definitely a good choice for liquid assets because it still earns small returns without having to wait a long time. This type of fund takes about 6 months to 1 year to mature. It’s considered one of the least risky investment options because of its high liquidity.
Some of the things that need to be taken into consideration with looking into which money market fund options might be right for you are the minimum investment needed, the administrative fees, the maturity period, and the early withdrawal fees.
TIME DEPOSITS
Another good investment option is a time deposit. Time deposits are a kind of bank account that earns a fixed interest over a period of time. During the specified term, the money cannot be withdrawn. In some cases, it can be withdrawn with but it will have an early withdrawal fee.
The selection of lock-in periods can range from 30 days to 5 years. Interest rates of time deposits are higher than savings accounts. This could be a good investment if you have passive money that you would like to grow. Just like savings accounts, these are options often given by traditional banks but digital banks have better rates.
STOCKS
Investing in stocks can be for the long-term or for the short term. Short-term stocks mean more attention but with the right research, you should be able to get a good return. A disclaimer would be that stocks do not always guarantee a return.
Some things to consider when looking for short-term stocks would be the stability of the company and understanding the risk involved for each stock bought. If you would like to learn more about stock trading and the stock market, definitely check out the free lessons at Investa University.
ONLINE SAVINGS ACCOUNT
The most common option in this list would be a savings account, more specifically a savings account opened in a digital bank. To be honest, traditional banks’ savings accounts often provide the worst interest rates. Instead of investing your money there, look for higher interest rates in digital banks.
Digital banks can offer fewer fees which means more profit for the customers. Some things to keep in mind when looking for an online savings account would be to make sure they don’t have a minimum deposit, check if they have fees per deposit, and no hidden fees.
Remember Ka-Investa, there is no better investment — only the one that fits your lifestyle. Whatever you choose among all of these, the most important thing about investing is to START NOW.
