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Savings Toolbox
Exploring savings and investment options
"What is the smartest thing to do with my money?" That can be a challenging
question, even for experienced investors. Where and how you invest will depend on how
much and how often you want to make deposits. Before you move your money around, read over
these brief descriptions so you can chose an option that will keep your money working
for you.
Short-term
- Savings accounts:
These accounts may not earn a lot of interest but you’ll earn more than you would
putting your money under your mattress.
- Money market funds:
These are special mutual funds that invest in short-term bonds. They usually have higher
interest rates than a savings account, but less than the rate on a CD.
- Certificates of deposit
(CD): This deposit is usually made at a bank or other financial institution.
The interest rate is usually comparable to a short- or intermediate-term bond. On the
date of maturity, ranging anywhere from six months to two years, you receive your
initial investment, as well as any interest accrued.
Long-term
- Bonds: These are similar to CDs except they are usually issued by a
corporation or the government. The rate is fixed when the bond is sold.
Read more about government
savings bonds.
- Stock: These allow a person to own a portion, or a share, of a company. The
value of a share depends on the success of the company.
- Mutual funds: These funds allow investors to pool their money to
buy stock, bonds or anything else the fund manager may choose. You turn over the
responsibility of managing that money to a professional, which means less stress for you.
Retirement plans
- Individual Retirement
Accounts (IRA): These tax-deferred retirement funds allow you to invest your money
however you like. There are a few different
kinds of IRAs to suit almost any need.
- 401(k): This retirement plan is offered by employers, many of which offer matching
programs. This means that they’re giving you free money to invest.
Still confused about how to invest your hard-earned money? The Financial Advisors at
Northwest Financial Resources can help
you choose an investing plan that is right for you.
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