Short Term Investments
February 16th, 2007
There are many short term investments for you to choose from. However, the best short term investments are ones that are safe and yield as high return as possible. Most people think a Certificate Of Deposit is the best short term investment. This is not necessarily true. You should explore all the short term investment options before investing.
There are short term stock investments as well as short term bond investments or short term fixed income investments. If you don’t mind the low interest rates, you can also invest in short term investments using Money Market funds. However they are not the best high yield short term investments. But, Money Market short term investments are deemed the safest. Before are some short term investment options explained. You can use the information on short term investments below to plan your short term investment strategies.
Certificates of deposit (CDs)
Certificates of deposit or CDs are debt securities offered by banks or financial institutions. Generally a Certificate Of Deposit is issued for a specific dollar amount such as a $1000 Certificate Of Deposit. Some certificates of deposit are more for short term investments than others. Certificates of deposits are also issued for a specific period of time such as 1 month, 3 months or 6 months. The Certificate Of Deposit rates are fixed.
Savings accounts
A safe short term investment is to put money in savings accounts. A savings account is a deposit account at a bank or savings and loans institution that pay interest. You money is generally not locked in, unlike when investing in certificates of deposit. You can also do short term investments in Money Market accounts.
Money Market funds
Money Market funds are mutual funds that are very liquid. Money Market funds are for short term investments, unlike regular mutual funds.
US Treasury bills
US treasury bills or T-bills are short term government debt obligations. T-bills investments are safe and although T-bills are short term investments, you money is locked in for months to a year.
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