Wanting to Invest more

[Roupey03]

1. I have 6900 dollars in an ING savings account that is collecting 4.5% interest.

2. I have 5200 that is in a state retirment for my time as a college intern for the state of Ohio. I am no longer contributing to it because I have moved on and I am no longer working for the state, but it is still growing due to interest earned.

I have no credit card debt, a car thats paid for, the only debt I have is a student loan that I am required to pay 115 a month. It is at 4.5% and I am currently paying 200 a month.

I am currently putting 50 dollars a paycheck into ING via automatic savings plan. I was wondering if there was another investment that I could start that would allow me to do something similar and would preform better.

[Ima saver]

I would open a good no load roth IRA in a mutual fund company like Vanguard. You can put $4000 a year in there and withdraw it tax free when you retire.

[kv968]

It all depends what the money is for. If it's for something in the near future (1-3 yrs) you should keep it right where it's going. If the $6900 is a decent emergency fund and the money isn't earmarked for anything in the near future, you could always invest in mutual funds or stocks. However there's always the risk that you'll lose money with either of those. Especially with the way the market is currently going.

If you'd like to save more for retirement, you could enroll in a 401k if your current employer offers one and if not, start an IRA.

[Roupey03]

I want to invest but I wasnt really looking for it to be towards retirment. Since I have my state retirement already that is growing at a pretty good pace. I then have 401k starting soon at work soon. I am just looking some place to stash money that we dont necessarily need at the moment, but may want to use in the future for a downpayment on a house. My concern is just being able to put away money and having a better return rate then that of ING or an online savings account.

[kv968]

You could put your money in a mutual fund and you MAY get a better return than what you're currently getting. Keyword being "may". There's no guarantee that you will. Risk = rewards (sometimes).

If you don't mind taking the risk that you may lose some, or even a lot, of the money you plan on investing elsewhere, you should go with either a market index fund for it's diversification, or even better, a balanced fund, which holds bonds and cash within it, to take away some of the volitility of a 100% stock fund.

[Ima saver]

If you want to use the money for a downpayment, I would leave it where it is, or find an one line bank that is paying at least 5% There are several of those.

[Roupey03]

I think I am going to go ahead and switch my savings to Huntingbank. That is who my checking account has been with for the past 3 years. They just opened something called Huntington Direct its the same as ING and they offer 5.2% on balances over 1,000

[Scanner]

It sounds like you have a frugal, responsible lifestyle down - congratulations, that's 80% the battle - living within your means.

I think you just need to start to write down some goals. It's okay to have a "Slush Fund" so to speak, which would cover a new car when needed, emergencies, vacations, etc. and a savings account is a good choice for that, in fact, the correct choice.

If you really want to try for an extra .5-1%, you could try to "ladder" CD's.

You buy $1000 CD's and put different dates of maturity on them, so you always have some access to your prinicipal. So, if you had $8000, you may buy:

2 $1000 2 year CD's (do they even come in 2year increments? I confess I'm not sure)
2 $1000 1 year CD's
2 $1000 6 month CD's
2 $1000 3 month CD's

You will effectively raise your interest rate by going with the longer maturity.

However, the internet savings accounts are so good, you'll have to decide if the .5-1% is worth the illiquidity.