Finding a good place to store your money will depend on several different factors, including safety, convenience, and return on investment. With the many federally protected savings institutions available today however, there are a lot of safe and convenient options available. This makes potential investment yield the deciding factor for many people when they are deciding where to store their money. Historically, savings accounts were considered to be a safe, low risk place to store money. However, the interest rates on these accounts are currently at record lows. At some banks, these accounts do not even give a return.
A better option is certificates of deposit. While the current rates on these investments are lower than they have been in the past, they are federally protected investments that cannot lose their original principle. Currently, interest rates are hovering between two and three percent, making this investment one of the best places to put money if the money needs to be safe. If an investor is willing to sacrifice some security, there are other places to put their money that will give a higher return.
Mutual funds are collections of various stocks that investors can place any amount of money into. By spreading out their money over many different companies, the risk of losing everything is minimized. Mutual funds are very volatile investments, however, making them a poor choice for an investor who does not want to see swings of ten percent or more in his or her investment’s value from day to day. Investors who can put their money aside for several years, however, often find that they can get returns of between seven and nine percent a year from mutual fund. Of course, selling then investment during s good market is critical to making this kind of return, making this investment only ideal for people who can wait to sell their mutual fund until market conditions are right.
For investors who can handle a lot of risk, real estate investment trusts can yield returns of forty percent or more. These funds Invest in a variety of real estate related investments, including commercial, residential, and industrial properties. While some of these funds are safer than others, the recent swings in the real estate market have shown that these funds are very volatile. Nonetheless, many investors have found that they are an excellent place to put money for large returns. Of course, be careful to research any investment before giving a company your money.