Best way to invest a small amount of money?

[Armywife]

Hi all,

For the past few days, I've been thinking of ways to maximize growth on a small amount of money I have available ($379.50 to be exact) which does not affect me financially at all. This is all money my family and I have found in the forms of pennies, nickels, dimes, and the more attractive upward denominations in one year of looking

Since this is the money we have amassed in one year, I have decided to try to make it work for us. At first I thought of buying stock but I am all thumbs when it comes to the stock market (plus, I'd like to keep it fairly liquid if at all possible). Earlier this week, I opened up a passbook account and found out that the interest rate is (cringe) 0.25% every THREE months. I'll be closing that account since the amount is just tooo small so I figured I'd ask the gurus here before I try to put the money into another odd account.

Thanks in advance!
Armywife

[KellyJef]

HSBC online account is paying 5.05%

[disneysteve]

I'd go with a high-yield savings account like Emigrant or AmTrust or HSBC or something similar. You'll get a little over 5%. If you won't need to touch the money for a little while, 6-month CDs are around 5.6%.

[greedy4chips]

$250 into and ING account to get the $25 bonus. Plus you can refer family members and they will also get $25, while you get another $10 for each one who does sign up using your referral link.

Virtual bank will pay you $20 to open an acct with them if you are referred by someone. Just ask for a link I am sure someone here has one. You can then refer up to 50 more people who each get $20 and you get $20 (possible to make $1000) this way!

ING does pay a little lower interest rate so only keep the $250 there for a minimum of 90 days to earn the $25. After that move it to a higher yielding acct like Emigrant.

[safari]

I agree with greedy4chips, you should open an ING account through a referral link and earn the $25 bonus. With the small amount of money that you have, the interest rate doesn't really matter, you should just go for the bonuses. For example, if you deposit $379.50 at ING, you will earn $16.70 interest after a year (4.4%), compared to $19.16 with Emigrant (5.05%). The difference is only $2.46 a year; it's not worth the hassle of opening another account. Also, if you add the $25 to your initial deposit at ING, the interest after a year is going to be $17.80, only $1.36 less than at Emigrant.

[Armywife]

Thanks for the replies. I already have an ING account but I am considering trying this apple bank grand yield savings thingie. A friend gave me a free $25 card to open an account at commerce bank which I'm thinking of using first then once the money is credited to my account, close it and switch over to Apple bank... hehehe.. i'll post the progress of this money on my blog

[Laridar]

Wow, I read a very interesting book about this concept (Mac Investment), this concerns the best way to invest money. Very interesting!!!

[ukey]

May seem weird to most, but I think if its something that will not affect your financial situation, use it to buy books to build up your financial education. That will help when things that do affect you financially happens, and you would be able to do somethign about it then.

Whatever your decision, good luck!

[financialnut]

Great advice all! These forums are fantastic. I think it's great how much everybody is willing to share.

I have about $500 of "extra" money to play with. I think I may get into stocks. This money is considered "fun money," so it's not a big deal at all if I lose it.

[swaymonae]

If you open up a B of A MyAccess checking account with $25 min. deposit, and also a savings account with $300 min deposit, you get $50 deposited into your checking free. You also have to sign up for "keep the change"..

Bank of America deal

[techguru]

Put your money into a CD or a ROTH IRA. They are low risk and will always pay at a positive return. Always.

[brianmortgage]

Really it was the best and foremost way to invest the small amount of money.

[Pragmatist]

I concur with the others. A high-interest bank account is the way to go. But you should also consider what you are saving for. Having a goal in mind will encourage you to save more (amount, timeline, regular contribution amount, etc.).

Also, check out saveandinvest.org.

It's a personal finance site by the FINRA Investor Education Foundation created for military families. It's got a lot of basic financial advice you might find useful.

[devatha]

Originally Posted by ukey

May seem weird to most, but I think if its something that will not affect your financial situation, use it to buy books to build up your financial education. That will help when things that do affect you financially happens, and you would be able to do somethign about it then.

Whatever your decision, good luck!

I agree completely with ukey. What he said is absolutely correct. Some times proper things seem like weird!!! people are not educated financially by the ed sys/parents. Some people don't have an interest. Some assume others will take care of the money. but, at least we should try to have basic to medium financial knowledge. Stock investing is not rocket science. It is another profession, if you know and stick to it's proper rules, we can earn money. It is only with knowledge that we can multiply our money.

[EEinNJ]

Let's see- $379.50 at 5%= about 19 bucks a year. Which you will pay income tax on. And have an account to keep track of, stuff in the mail, etc. Then you have to watch the interest rate, make sure they don't start charging you fees, etc. For that much money, it's not worth the trouble. Why not just buy a few savings bonds?

[nmboone]

379.50 three years later would be a lot more now. I wish I could get that 5% now! I got 5.15% at Emigrant back then. It's funny to dig old posts up and see financial numbers compared to nowadays!

[mikefullerton]

Originally Posted by EEinNJ

Let's see- $379.50 at 5%= about 19 bucks a year. Which you will pay income tax on. And have an account to keep track of, stuff in the mail, etc. Then you have to watch the interest rate, make sure they don't start charging you fees, etc. For that much money, it's not worth the trouble. Why not just buy a few savings bonds?

Hi,
That's what exactly the same thing that i did. Instead of buying all such paraphernalia, i invested in some saving bonds and i feel it is the best thing to do regarding saving as well as income generation point of view.

Regards
Mike
Fullerton Securities India

[conancare]

How do you think about the strategy that during favorable market situation our money are invested in equities and during unfavorable market situation money are transferred to government bonds.

Regards
Conan