Make the most of your money.
Building a balanced portfolio means investing some money in potentially lucrative but volatile investments, like stocks, and some money in conservative investments, like certificates of deposit and money market accounts. If you shop around carefully, you can find secured investments that pay a solid rate of interest and help your money grow.
Certificate of Deposit
Certificates of deposit require you to keep your money tied up for a set period, in return for a higher rate of interest than you could get in a savings or checking account. Some CD terms are as short as a few months, while others are as long as five years or more. The rate typically goes up as the term increases, so you need to balance the inconvenience of not having access to your money against the higher return.
High-Yield Savings Account
While many savings accounts pay next to nothing, high-yield savings accounts typically pay a lot more. You can find these high-yield savings accounts at both local and online banks, but Internet banks often offer higher rates. You might have to meet a number of requirements to qualify for those high rates, including establishing and maintaining a direct deposit and keeping a minimum balance in the account.
High-Yield Checking Account
High-yield checking accounts provide a mix of convenience, safety and high interest, but you may have to jump through a few hoops to get the best return on your money. Many high-yield checking accounts require customers to make a minimum number of debit card purchases each month, and to maintain a monthly direct deposit as well. Be sure to check the rules carefully, because if you fail to meet the requirements your high yield could disappear.
Money Market Account
Money market accounts typically pay more than regular savings accounts, with yields similar to high-yield savings and checking accounts. Like savings and checking accounts, money market accounts provide ready access to your money, although they sometimes impose restrictions on the number of checks and other withdrawals you can make in a given month. Shopping around is the best way to get the highest rate on your money market account, with many online banks offering higher rates than their brick and mortar counterparts.
