Investing proves to be an absolute must for those who want to enjoy a comfortable future. With the start of New Year, you can dedicate yourself to some of the best investments which I believe can turn around to be a big turnaround for your prospect.
Below are three of the best investments you can consider making this year.
1. Certificate of Deposit
Also known as CDs, these financial products are obtained from banks and have a higher interest rate than savings accounts. It may let you make almost 2.25% interest profit on your investments.
Certificates of Deposits hold specific maturity dates ranging from several weeks to several years. Since these deposits are time-bound, you can’t withdraw your money for a specific time without having to pay penalty costs.
By investing in CDs, you can receive good profits at regular intervals. Once it reaches the maturity date, you will be able to receive your original money with any accrued interest.
While certificates of deposits are considered safe investments, they do involve certain risks as well. If the interest rate falls, for example, you are likely to make less money when you reinvest original and interest in new certificates with lower rates.
2. Treasury Securities
There are different types of treasury securities issued by the U.S governments. These investments are not only some of the safest options to choose from but also have a good profit margin for investors.
Treasury bills or T-bills, for example, work with a maturity period of twelve months or less. Technically, they do not bear interest. You can purchase them for a discounted amount from their face value. However, when they reach maturity, you will be paid its full face value by the government.
Treasury Notes, on the other hand, come with different maturity periods, such as two, five, seven, and the years. It allows you to earn fixed interest every 6 months. Likewise, you will get the face value upon maturity. Depending on the demand by investors, the price of Treasury Notes will vary. It could be less or greater than or even equal to the face value of the T-Note. If there is a higher demand by investors, you can trade the notes at a premium. This will reduce an investor’s return.
3. Money Market Accounts
Money market accounts refer to FDIC-insured deposit accounts with a much higher interest. These accounts enable investors to earn a better profit than they may receive from savings accounts. Since money market accounts possess good liquidity and involve higher yields, they can be one of the best options for your emergency savings.
Generally, investors need to accept more restrictions at the time of withdrawals when it comes to earning better interest earnings. These limits may include limiting the number of times you can access your capital. Moreover, these investments carry certain risks, such as inflation rates.
The Bottom Line
Investing has gained significant importance over the years. This is most probably because of the social security benefits that accompany an unknown future in the present time. As a wise man, you should consider one of the aforementioned investment options to have a promising future for you and your family.
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