Investing For Short-Term Savings Goals

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

What Are the Best Investments for Short-Term Goals?

When it comes to short-term investing, you have a few options. Some of the best investments for short-term goals include:

  • Savings Accounts: Savings accounts are a safe and secure way to invest money. They offer a guaranteed rate of return and are FDIC-insured, meaning your money is protected by up to $250,000 per depositor.
  • Money Market Accounts: Money market accounts are similar to savings accounts, but they offer a higher rate of return. However, they typically require a higher minimum balance to open and maintain.
  • CDs: CDs (certificates of deposit) are another safe investment option. They offer a fixed rate of return over a specific period and are FDIC-insured. Again, however, you’ll need to be comfortable locking your money up for a specific period.

Savings Accounts

Savings accounts are an excellent option for short-term goals, such as building an emergency fund or saving for a down payment on a home. They offer a guaranteed rate of return, and you can withdraw your money at any time without penalty.

Short Term Savings Goals

Money Market Accounts

Money market accounts are a good option if you want a higher rate of return than a savings account but still want your money to be easily accessible. They offer a higher interest rate but typically require a higher minimum balance.

Our Favorite Rates To Grow Your Money

TermSavings AccountInstitutionAPY
N/AMoney Market AccountUNCLE Credit Union5.26%
N/ASavings AccountCloudbank 2475.26%
12 MonthsCDBread Savings5.25%
5 YearsFixed AnnuityWichita National6.30%

Disclaimer: This is a comparison review. The Annuity Expert is not associated with a bank or credit union. We aim to help you find the highest interest rates for your savings. We may receive a small referral fee if you purchase something using a link in this guide.

How Should I Allocate My Savings?

Once you’ve chosen the best investment options for your short-term goals, you must determine how to allocate your savings. The rule of thumb is to divide your savings into three categories:

  • Emergency Fund: Your emergency fund should be the priority. It should cover three to six months of living expenses and be easily accessible.
  • Short-Term Goals: Your short-term goals should be next in line. This could include saving for a down payment on a home, a new car, or a vacation.
  • Long-Term Goals: You should allocate some of your savings to long-term goals, such as retirement or a child’s education.

Emergency Fund

Your emergency fund should be kept in a savings or money market account. You should save at least three to six months of living expenses. This will provide you with a safety net in case of unexpected expenses, such as job loss or a medical emergency.

Short-Term Goals

You should invest in a CD or a money market account for short-term goals. CDs offer a higher rate of return than savings accounts, but you’ll need to be comfortable locking your money up for a specific period.

Best Short Term Savings Accounts

What’s the Best 10-Year Investment Plan?

Investing for the long term requires a different strategy than short-term investing. Therefore, when planning a 10-year investment plan, you must consider your risk tolerance, investment goals, and overall financial situation. Here’s a breakdown of the best 10-year investment plan:

  • Start with a solid foundation: Ensure you have a solid financial foundation before investing. This means paying off high-interest debt, building an emergency fund, and having adequate insurance coverage.
  • Determine your risk tolerance: Your risk tolerance will determine how you allocate your investments. If you’re risk-averse, you may want to consider investing in more conservative options, such as bonds or mutual funds. On the other hand, if you’re comfortable with risk, you may want to consider investing in stocks or exchange-traded funds (ETFs).
  • Diversify your portfolio: Diversification is critical to minimizing risk and maximizing returns. This means investing in a mix of stocks, bonds, and other assets, such as real estate or commodities.
  • Rebalance regularly: Over time, your portfolio will naturally shift as some investments perform better than others. Therefore, it’s important to rebalance your portfolio regularly to ensure you’re still on track to meet your goals.

Conservative 10-Year Investment Plan

If you’re risk-averse and prefer a conservative approach to invest, consider the following investment plan:

  • First, invest in a mix of bonds and mutual funds, focusing on low-risk options.
  • Allocate 60% of your portfolio to bonds and 40% to mutual funds.

Finally, rebalance your portfolio annually to ensure you’re still on track to meet your goals.

Aggressive 10-Year Investment Plan

If you’re comfortable with risk and want to pursue an aggressive investment strategy, consider the following investment plan:

  • First, invest in a mix of stocks and ETFs focusing on growth.
  • Next, allocate 80% of your portfolio to stocks and 20% to ETFs.
  • Finally, rebalance your portfolio quarterly to ensure you’re still on track to meet your goals.
Best Short Term Savings Options

Why Should Consumers Make Online Banking a Long-Term Priority?

For a good reason, online banking has become increasingly popular. Online banking has many benefits, including convenience, accessibility, and security. Here are some reasons why consumers should make online banking a long-term priority:

  • Convenience: Online banking allows you to manage your finances from anywhere, at any time. You can check your account balances, transfer funds, pay bills, and more from home.
  • Accessibility: Online banking is accessible to anyone with an internet connection. This makes it an excellent option for people who live in remote areas or have mobility issues.
  • Security: Online banking is safe and secure, thanks to features like two-factor authentication, encryption, and fraud detection.

Benefits of Online Banking

  • Easy access to account information: Online banking allows you to easily access your account information, such as your account balances, transaction history, and interest rates.
  • Ability to pay bills online: With online banking, you can pay your bills online, which saves time and money.

Tips for Secure Online Banking

  • Use strong passwords and change them regularly.
  • Keep your computer and mobile devices up-to-date with the latest security patches.
  • Don’t use public Wi-Fi to access your online banking account.

Next Steps

Investing in short-term goals can be a powerful tool to gain financial stability, both now and in the future. Although it requires thought and diligence to identify your short-term financial goals, carefully select suitable investment vehicles, and assess potential risks, taking the time to make intelligent decisions today will help you achieve greater peace of mind tomorrow. Ultimately, to reach your short-term financial objectives and pave the way to financial freedom, consider investing your hard-earned money for long-term success. Don’t forget to compare interest rates and choose the best investments for your situation!

How To Invest For Short Term Goals

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Frequently Asked Questions

What are some of the different investment options available for short-term savings?

Some short-term investment options include savings accounts, money market accounts, CDs, and short-term bond funds.

Why is it important to invest for short-term savings goals?

Investing for short-term savings goals can help you earn higher returns than keeping money in a traditional savings account.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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