If you have managed to save some extra cash and want to grow it with time, investing is a must.
By investing your saved funds, you can generate more money to contribute to different categories such as an emergency fund, a retirement account, or a down payment for your home or car. You may need investment income to fulfill prime life goals such as paying off debts and fixing your credit problems. Coping with high-interest debts, especially credit card debt is difficult. So, you will require additional funds and a strong budget plan to fight against credit card debt issues.
When it comes to investments, you have two main options to pick, a) short term investments and b) long term investments. Long term investments have greater returns but come with greater risks and longer processing times. Comparatively, short term investments are easily accessible and have lower risks. They also enable to you recover a profit in fewer than five years. Here are some of the best short term investment options for 2020:
1. Lending Club
Lending Club is a Peer to Peer lending platform that makes it easy to invest in loans to individuals and companies. Loans on this platform are either three or five years. So, if you have the time to invest your money for such a period, Lending Club is a good option for you.
2. Municipal Bonds
Similar to treasury securities where you invest money in the federal government, with municipal bonds, you lend money to states and municipalities. Most municipal bonds have terms of 25 or 30 years at the time of issuing.
3. Certificates of Deposit (CDs)
A CD is a product offered by banks and credit unions that offer high interest to person for depositing money for a specified length of time. The period may range from 3 months to 5 or more years. Basically, the more you can wait, the higher the interest rate. But keep in mind, if you want to withdraw your money before the CD term ends, you have to pay a penalty.
4. U.S. Government Securities
Government securities are bonds issued by the government when you loan them money with a promise of repayment upon the security's mature date. The U.S. Treasury may offer you good securities with maturities of five years or less. Types of U.S. government securities include:
- Treasury bills- these mature within one year or less
- Treasury notes- these mature between one to ten years
- Treasury inflation-protected securities (TIPS) - these have five-year maturities. The principal is normally adjusted considering the changes in the consumer price index.
- Floating rate notes (FRNs)- these have variable interest rates
Be sure to examine each option carefully to determine which ones are best for you and your investment needs.
Patricia Sanders is a financial content writer. She is a regular contributor at DebtConsolidationCare.com. Her passion for helping people who are stuck in financial problems has earned her recognition and honor in the industry. To get in touch with her (or if you have any questions regarding this article) email her at sanderspatricia29@gmail.com.
