Your Best Ideas For Earning Interest
 

Well, I've had a decent amount of money sitting in a savings account at my local bank for a few months now, and I'm trying to think of a good way to earn more interest on it.

I'm sure I'm not really aware of all of my options, so I was hoping you guys (and gals) could give me a little financial advice. Right now, the money's not doing squat...as it's only earning .75% interest. Maybe some of you could recommend a good online bank, or point me towards an article explaining what not-so-well-known options are available.

Forgive my financial ignorance, as I'm young & fairly ignorant when it comes to things such as this. :helpme Any and All Help is Greatly Appreciated!

Thanks,
c-lo

How risky are you?

Bonds pay higher rates, and the riskier the bond, the more interest you're going to make...but it's not much higher, trust me. I say bonds instead of stocks, cause you specifically asked about interest rates...

jsut get an emmigrantdirect.com account @ 4%. safe, and good %

just invest it in companies that offer great dividends :thumbsup

Alot of factors go into this such as how long you plan to save, risk, ect...

Options:
Savings Account (Your bank is going to offer a low rate around what you're getting 0.75) But a FREE third party like ING Direct is going to offer 3.75% (Everyone seems to like ING Direct) Now you can go higher with Emigrantdirect which offers 4.25% but I hear they have poor customer service. So I think I'd rather do with out the extra 0.50% just for some good support. When you setup an account with either company they basicly "attach" to your bank account where you can withdraw and deposit from their interface. Easy, pleasey, japanesey. Accounts are FDIC insured upto $100,000 and you can have upto 2 accounts with each company so you can have a total of $200,000 in there that is FDIC insured.

Now another option would be aggressive growth mutual funds where you _could_ see returns up to 10% APY. But you'll need to do more research on this your self.

Then there are always CD's and RothIRA's. Basicly with a roth you pay tax when you put the money in then the interest is tax free and clean and clear for when you withdraw.

Lots of options currently I just save in an ING Direct Orange savings account.. but looking into more options for higher return but the higher the return the higher the risk. You may also want to look into an overseas savings account. For example England has a standard 6% AER (APY) return.

billywatson: Well, I'm not looking for anything too risky, I'd prefer to lean towards lower & safer as this is money I plan to rely on later in life.

milkit: So what would the amount of interest be per $1,000? It's been awhile since I've had to calculate interest, and frankly I'm unconfident in the fact that I can remember how.

If you don't know, then can someone point me to an online calculator or something of the sort? Much appreciated!

FredIsMe: Any specific companies you can recommend? I'll look into the sort.

Thanks guys. Really appreciate the help.

later
c-lo

Wow fallenmuffin, that was a great informative post. Thank you for taking the time to explain it to me.

I'll definitely look into ING Direct, Emigrant Direct, overseas accounts, & the aggressive growth funds. (keeping in mind the aforementioned "_could_")

Thanks again everyone,
c-lo

With inflation, you are fucked no matter where you let your money sit!

There are smaller banks out there that should offer better rates than ING (at least that's the case in Canada) that are FDIC insured up to a reasonable amount.

If you want to try something a bit risky, look at oil and gas Income Trusts that trade on the TSX (the Canadian version of the NYSE). I hold several that pay between 12 and 15% in distributions but they trade like equities so can plummet in bad markets.

hershie: Thanks for the info, though I figure I'll probably end up going with something less risky. (I'm a wuss/tightass like that.)

bdjuf: Damn. Well, here, take it. :)


c-lo

Invest in prostitutes, works every time :thumbsup

It all depends on the amount of money you have to invest. If you have a large enough sum, you cold look into city/county tax lein certificates. They often pay 16% guaranteed, but require the money to stay put for some time.

As fallenmuffin suggested, you could go for an aggressive mutual fund. I'm a big fan of the matthews family of foreign investment funds, in particual the matthews china fund and the matthews korea fund. Pretty high risk as far as mutual funds go, but the returns have been great.

Bank accounts and CD's wont even keep pace with inflation. THey're better that hiding your money in a coffee can buried in the back yard, but they wont make you any money and really cant be considered an investment in my opinion.

As far as risk goes, the rule of thumb I was taught is to subtract your age from 100 and then invest up to that percentage in high risk and the remainder in lower risk investments.

I like ING - reasonable interest and safe

That's why "investing" is the only way to go, real estate, stocks etc..

High risk mutuals