What is the best short-term investment so I can continue earning interest while in college.
It needs to be liquid enough to be able to withdraw tuition and living expenses every year.
Answers | 2
If you won't need the money for, say, 3 - 5 years, you may be able to put it in a CD. This will allow you to earn more interest than a savings account, but it is locked up for a longer period of time.
If you don't need the money for anything in particular for 5+ years, you may want to consider a mutual fund. In general, the stock markets will allow you to earn more money than the other investments, however, you run the risk of losing your principle amount.
It sounds like a savings account or money market account might work best for you. Check out online savings accounts as they often pay more interest than a traditional "brick and mortar" bank.
Some questions for you:
What is your MARR -Minimally Acceptable Rate of Return?
What is the total amount you have to invest?
What are your liquidity requirements?
Obviously, an FDIC account will give you liquidity and a very low rate.
There are some cash flow strategies that are low risk high return that we can put you in. Many of these are $100K minimum but they can generate 20%+ yearly returns and we can cater this to meet your liquidity requirements. Keep in mind that the liquid component will have a much lower rate.
CD's and annuities have lock-up periods, as well as, fees. Those that are less than one year are very low rates. So, after taxes & fees you may be left with less than you started with. CAGR plus an interest rate greater than inflation would be the ideal environment you seek.
So, if you can send me a message with specifics like Total amount, liquidity requirement, MARR, or whatever you have the answers to. We may be able to customize a solution for you. No obligation
Hope this helps
It's not what you make, It's what you keep that determines your lifestyle