Ways To Increase The Rate Of Return On Your Savings
The current rate on most savings accounts is a lot less than inspiring.
Some banks have slipped to less than a tenth of one percent on standard savings accounts.
With rates so low, there is no mystery why people are looking for any way possible to get a better return on their savings.
Here are a few ways that you might be able to get more bang for your buck.
The most obvious is to shop around.
Banks with smaller portfolios often offer higher rates on savings accounts to attract more customers.
Credit unions have been known to offer higher rates than banks, as well.
Investing through a Brokerage Firm Investing in the stock market can be a bit risky, especially if you buy stocks instead of mutual funds.
The upfront cash needed discourages many people with modest incomes.
Try calling a large brokerage firm.
Many of them have ways that will allow you to invest for about $100 per month.
Do not discount mutual finds.
Yes, the return is lower than with stocks, but they are considerably less risky.
If you feel like playing the stock market with virtually no risk, then you should consider buying bonds.
These are issued by companies or government agencies and are basically an IOU that pays interest.
Only a little bit of interest, but more than you can get from your bank right now.
Micro-Loans A relatively new concept is the micro-loan.
You loan money directly to a pre-screened business or individual for a variety of projects.
The business will pay you back at a determined rate.
The default rate is usually low since the projects are vetted by the websites that are offering the opportunities.
There are several sites in the industry at this time, including one associated with PayPal.
Peer-to-Peer Lending An option that is riskier than a microloan is peer-to-peer lending.
You lend directly to someone for a multitude of projects.
You can get a description of the project and some information about the lender, but the websites that list these projects do not guarantee repayment.
Most of the sites offer a clue as to your likelihood of getting repaid, though.
The more interest you will receive, the riskier the loan.
As usual, your tolerance of risk is what determines how you invest your savings.
If safety is your goal, keep your money in a bank CD or bonds.
If you can lose the money you are investing, then why not try a microloan?
Some banks have slipped to less than a tenth of one percent on standard savings accounts.
With rates so low, there is no mystery why people are looking for any way possible to get a better return on their savings.
Here are a few ways that you might be able to get more bang for your buck.
The most obvious is to shop around.
Banks with smaller portfolios often offer higher rates on savings accounts to attract more customers.
Credit unions have been known to offer higher rates than banks, as well.
Investing through a Brokerage Firm Investing in the stock market can be a bit risky, especially if you buy stocks instead of mutual funds.
The upfront cash needed discourages many people with modest incomes.
Try calling a large brokerage firm.
Many of them have ways that will allow you to invest for about $100 per month.
Do not discount mutual finds.
Yes, the return is lower than with stocks, but they are considerably less risky.
If you feel like playing the stock market with virtually no risk, then you should consider buying bonds.
These are issued by companies or government agencies and are basically an IOU that pays interest.
Only a little bit of interest, but more than you can get from your bank right now.
Micro-Loans A relatively new concept is the micro-loan.
You loan money directly to a pre-screened business or individual for a variety of projects.
The business will pay you back at a determined rate.
The default rate is usually low since the projects are vetted by the websites that are offering the opportunities.
There are several sites in the industry at this time, including one associated with PayPal.
Peer-to-Peer Lending An option that is riskier than a microloan is peer-to-peer lending.
You lend directly to someone for a multitude of projects.
You can get a description of the project and some information about the lender, but the websites that list these projects do not guarantee repayment.
Most of the sites offer a clue as to your likelihood of getting repaid, though.
The more interest you will receive, the riskier the loan.
As usual, your tolerance of risk is what determines how you invest your savings.
If safety is your goal, keep your money in a bank CD or bonds.
If you can lose the money you are investing, then why not try a microloan?
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