What is the best place to invest cash wisely? Let’s assume that investing wisely means – with a little or no risk at all. If you just want to place your money wisely with no risk consider all the options mentioned below. Usually with all these types of investments if you’ll need your money before the bond or CD matures, you may not get back all of your original investment or pay a penalty of three months earnings, for instance.
Checking accounts: meant for transactions, not savings so usually don’t pay much, if any, interest.
Savings accounts: the interest isn’t usually enough to even keep up with inflation. Money insured by the FDIC.
High-yield bank accounts: Quite better than savings account. Money insured by the FDIC.
Money market deposit accounts: require a minimum balance, and permit a limited number of transactions per month. Money insured by the FDIC.
Money market funds: offered by brokerages and mutual fund families. Quite safe but money is not FDIC insured.
CDs (Certificates of deposit): can vary from 3 to 60 months and can pay more than money markets. Money insured by the FDIC.
U.S. government bills or notes: backed by the U.S. government.
I Bonds (inflation-indexed savings bonds): issued and backed by the U.S. government.
Municipal bonds: issued by state and local governments in order to build projects for the public good.
Corporate bonds: represent debt issued by companies. Only short-term bonds are appropriate for short-term savings. Usually pay more than government securities, CDs and money markets.
Bond funds: mutual funds that use the money of investors to purchase bonds of all kinds (diversification that minimizes the risk).
And now some opinions on these products I found on few investing forums :
“Money market funds pay next to nothing, just like savings accounts.”
“I think gold is a pretty good hedge against inflation”.
“You simply can’t desire more money, fast with little or no risk. Contact a professional at one of your local brokerage firms. I have money within Cds, bonds, I-bonds and Stocks. Diversify your assets and you’d have nothing to worry about.”
“If you ask me, I’d wait for a 20-30% dip in the markets this summer and fall of 2013 and then put it all in SPY S and P 500 Index Fund.”
Warren Buffett’s best tip for personal finance – stay out of debt and buy index funds:
Many would say that there isn’t the best place to invest cash among the options mentioned above. For many people the best option was, is and always will be the stock market, forex or mutual fund. However, mind that these investments are much more risky and require a specific knowledge. Remember that Forex trading and stock market is based largely on speculation, so it’s very risky. Therefore you can earn and lose everything you invest very easy. It’s always up to you which option suits your needs best.