Thinking about where to invest £10,? The stock market is your best bet if you want to try to beat rising inflation.

Once you have your emergency fund of between three and six months&#; worth of essential outgoings in an easy access account and have paid off any expensive debt, then you might want to consider investing the rest.

In this article we explain:

This article contains affiliate links that can earn us revenue*

Is investing right for me?

The decision to invest will depend on what else is going on in your life, so here are some things you should think about:

• Do you have an emergency buffer? The recommendation is between three and six months&#; essential outgoings in an easy access savings account, so that you can get your hands on it when you need it.
• Are you planning a big life change such as having a baby or moving house? Make sure you have extra cash in a savings account.
• How much expensive debt, such as money owed on credit cards, do you have? You may well be better off putting your £10, towards that and switching to the best 0% balance transfer credit card.
• Have you considered overpaying your mortgage? It could save hundreds or thousands of pounds in interest.
• Are you about to retire soon or in ill health?

To mitigate risk, it&#;s recommended that you leave your money invested for at least five years. Investing is a good idea in the long run given than most banks offer paltry interest rates on savings accounts that don&#;t nearly beat the rising cost of living, measured by inflation.

Currently inflation in the UK is at %, while the average rate on savings across all banks is just %, with many offering just %.

If investing ticks the boxes, read on, but also check out our Investing for beginners guide.

Is £10, a good investment amount?

Yes, £10, is a good amount to invest. But as we mentioned, the longer you can leave your money invested, the better.

This will give it enough chance to grow and ride out any fluctuations in the stock market.

If you want to find out more about the basic principles of investing then we have produced a free online Investing for beginners course. Check out module onehere.

What is the best way to invest money?

1. Invest for a minimum five years

To get a decent return, you should invest for at least five to ten years. The longer you invest your money, the more time you have to:

• Accrue returns on your investment portfolio
• Ride out any market downturns
• Let your returns compound (grow in a snowball effect over time as returns get reinvested)

2. Choose a low cost platform

Fees can erode your pot over time, so we have outlined some of the best platforms for both cost and customer service here.

According to investment platform Vanguard, if you invested £10, for 30 years, assuming investment growth of 5% a year, your pot would be:

• 2% fee = £24,
• % fee = £37,

Watch out for early exit charges to access money within a few years of investing as well, as these can run into hundreds of pounds.

3. Choose a tax-efficient wrapper

You should use a tax-free wrapper to protect your investment returns from the taxman.

There are different types of tax-free financial products for you to consider, such as:

Within these products, you would then choose what to invest in. Here are tips on how to choose investment funds.

Where is the best place to put £10,?

As mentioned in the previous section, there are tax-free wrappers you should use to invest.

Which one you choose depends on your investment horizon (that is, when you think you might want to cash in the investment):

Short term (between five and ten years):

If you are investing money and think you will want to access it in five to ten years time, one of the best ways to invest £10, is in a stocks and shares ISA.

This is because (unlike a pension), you can access the money at whatever age you want.

Medium term (ten to 30 years):

A stocks and shares ISA is likely to be most suitable. That is unless you will turn 55 within 30 years, in which case a pension might be a better tax wrapper for you.

If you&#;re unsure about the time horizon, you could invest in a pension and a stocks and shares ISA.

Long term(30 plus years):

The best way to invest £10, for the long term is in a pension. It comes with substantial tax perks that will increase your pot size:

• Invest in a pension and you get tax relief from the government
• Workers get free cash from employers if they are invested in a workplace pension scheme

NOTE: You can’t get your hands on a pension until you are 55 (rising to 57 in ). Check out our pensions guide for more on this.

If you are self-employed, consider a self-invested personal pension or ready-made personal pension. Ask your pension provider if you’re allowed to increase your contribution, or even pay a one-off sum into it.

If you are shopping for a pension, Fidelity* is one of our top-rated providers. Find out whyhere.

How to invest £10, wisely

Invest according to your attitude to risk. To work this out you need to consider your “capacity for loss” and your “risk appetite”.

• Capacity for loss = how much you can afford to lose
• Risk appetite = how you feel about losing money

You should ask yourself these questions first:

1. Are you happy for your £10, investment to fall in value every now and then?
2. Do you want higher returns compared to if you’d left your money in cash?
3. Can you resist the urge to panic and sell your investment if it falls below what you paid for it?

If you answered yes to the above, it sounds like you would be comfortable investing. Find out more in our beginner&#;s guide to investing.

How to spread investment risk

Many investment experts recommend a 60/40 mix. That is an investment portfolio invested 60% in equities (company shares) and 40% in bonds.

For higher returns, the best investment for £10, are shares or equity funds (which are made up of shares). You could invest in a tracker fund that mimics the performance of stocks listed on the FTSE , which is a low-cost way of investing in shares.

Remember shares are higher risk than bonds.

The best way to invest £10, is to diversify it across:

• Different asset classes &#; like shares and bonds
• Different sectors and countries &#; like emerging markets (such as India) and developed countries (such as the UK)

Spreading your investments this way can help level out any fluctuations or falls in prices, so you weather the bad times and benefit from the good.

Why not learn more about investing in our free, online, five-part beginners course to investing?

Should I choose a ready-made portfolio?

If you aren&#;t confident enough to buy and sell investments, you could let an investment manager do it for you. It&#;s now possible to invest with low-cost robo-advisers which make all the decisions on your behalf.

Some good examples of robo-advisers include Nutmeg* and Wealthify. We outline the best robo-advisers here.

In order to select a ready-made portfolio, the robo-adviser will ask you a number of questions to establish your:

• Timeframe
• Risk profile
• Investment goals

Robo-advice can be one of the best ways to invest £10, because it is cheaper than the DIY approach.

If you have a larger lump sum, check out our article: How to invest £50,

Which ISA is right for me?

ISAs work best when you pick the right one for your savings goal. Take this short survey to find out which ISA is right for you.

• It only takes a couple of minutes
• No personal details required

How do you double up £10,?

The best way to double £10, is by investing for the long-term, rather than trying to get rich quickly.

Consider what returns you are looking to make and over what time period. But be realistic &#; you are unlikely to double £10, in a few years.

As tempting as it may be when you see some of the promised rates of returns on high-risk products or the rise of bitcoin, these are best avoided. That is, unless you absolutely know the risks and are happy to take them on.

Can you turn £10k into £k?

Yes, this is possible but it would take decades.

You should probably expect investment growth of about 4% every year. So at that rate it would take about 60 years before your £10, pot grew to £,

The key here is to remain invested for a long period of time and invest in assets with a high chance of return (like shares) in order to grow your pot to £,

Another tip is to drip-feed money into your pot over time to give it the best chance of growing. Here&#;s how to invest with little money.

How can I invest ethically?

If you don&#;t want to invest in companies involved in industries like gambling, tobacco or alcohol production, consider ethical investing.

Find out more about this in our guide to ethical investing.

How to review your investments

To enjoy a comfortable financial future, investing is absolutely essential for most people. As the coronavirus pandemic demonstrated, a seemingly stable economy can be quickly turned on its head, leaving those who weren&#x;t prepared for tough times scrambling for income.

But with bonds and CDs yielding so low, some assets at astronomical valuations and the economy struggling with surging inflation, what are the best investments for investors to make this year? One idea is to have a mix of safer investments and riskier, higher-return ones.

The best investments in

1. High-yield savings accounts
2. Short-term certificates of deposit
3. Short-term government bond funds
4. Series I bonds
5. Short-term corporate bond funds
6. S&P index funds
7. Dividend stock funds
8. Value stock funds
9. Nasdaq index funds
10. Rental housing
11. Cryptocurrency

Why invest?

Investing can provide you with another source of income, fund your retirement or even get you out of a financial jam. Above all, investing grows your wealth &#x; helping you meet your financial goals and increasing your purchasing power over time. Or maybe you&#x;ve recently sold your home or come into some money. It&#x;s a wise decision to let that money work for you.

While investing can build wealth, you&#x;ll also want to balance potential gains with the risk involved. And you&#x;ll want to be in a financial position to do so, meaning you&#x;ll need manageable debt levels, have an adequate emergency fund and be able to ride out the ups and downs of the market without needing to access your money.

There are many ways to invest &#x; from very safe choices such as CDs and money market accounts to medium-risk options such as corporate bonds, and even higher-risk picks such as stock index funds. That&#x;s great news, because it means you can find investments that offer a variety of returns and fit your risk profile. It also means that you can combine investments to create a well-rounded and diversified &#x; that is, safer &#x; portfolio.

Overview: Best investments in

1. High-yield savings accounts

A high-yield online savings account pays you interest on your cash balance. And just like a savings account earning pennies at your brick-and-mortar bank, high-yield online savings accounts are accessible vehicles for your cash. With fewer overhead costs, you can typically earn much higher interest rates at online banks. Plus, you can typically access the money by quickly transferring it to your primary bank or maybe even via an ATM.

A savings account is a good vehicle for those who need to access cash in the near future.

Best investment for

A high-yield savings account works well for risk-averse investors, and especially for those who need money in the short term and want to avoid the risk that they won&#x;t get their money back.

Risk

The banks that offer these accounts are FDIC-insured, so you don&#x;t have to worry about losing your deposit. While high-yield savings accounts are considered safe investments, like CDs, you do run the risk of losing purchasing power over time due to inflation, if rates are too low.

Where to open a savings account

You can browse Bankrate&#x;s list of best high-yield savings accounts for a top rate. Otherwise, banks and credit unions offer a savings account, though you may not get the best rate.

2. Short-term certificates of deposit

Certificates of deposit, or CDs, are issued by banks and generally offer a higher interest rate than savings accounts. And short-term CDs may be better options when you expect rates to rise, allowing you to re-invest at higher rates when the CD matures.

These federally insured time deposits have specific maturity dates that can range from several weeks to several years. Because these are time deposits, you cannot withdraw the money for a specified period of time without penalty.

With a CD, the financial institution pays you interest at regular intervals. Once it matures, you get your original principal back plus any accrued interest. It pays to shop around online for the best rates.

Because of their safety and higher payouts, CDs can be a good choice for retirees who don&#x;t need immediate income and are able to lock up their money for a little bit.

Best investment for

A CD works well for risk-averse investors, especially those who need money at a specific time and can tie up their cash in exchange for a bit more yield than they&#x;d find on a savings account.

Risk

CDs are considered safe investments. But they do carry reinvestment risk &#x; the risk that when interest rates fall, investors will earn less when they reinvest principal and interest in new CDs with lower rates, as we saw in and The opposite risk is that rates will rise and investors won&#x;t be able to take advantage because they&#x;ve already locked their money into a CD. And with rates expected to rise in , it may make sense to stick to short-term CDs, so that you can reinvest at higher rates in the near future.

It&#x;s important to note that inflation and taxes could significantly erode the purchasing power of your investment.

Where to buy a CD

Bankrate&#x;s list of best CD rates will help you find the best rate across the nation, instead of having to rely on what&#x;s available only in your local area. Alternatively, banks and credit unions typically offer CDs, though you&#x;re not likely to find the best rate locally.

3. Short-term government bond funds

Government bond funds are mutual funds or ETFs that invest in debt securities issued by the U.S. government and its agencies. Like short-term CDs, short-term government bond funds don&#x;t expose you to much risk if interest rates rise, as they&#x;re expected to do in

The funds invest in U.S. government debt and mortgage-backed securities issued by government-sponsored enterprises such as Fannie Mae and Freddie Mac. These government bond funds are well-suited for the low-risk investor.

These funds can also be a good choice for beginning investors and those looking for cash flow.

Best investment for

Government bond funds may work well for risk-averse investors, though some types of funds (like long-term bond funds) may fluctuate a lot more than short-term funds due to changes in the interest rate.

Risk

Funds that invest in government debt instruments are considered to be among the safest investments because the bonds are backed by the full faith and credit of the U.S. government.

If interest rates rise, the prices of existing bonds drop; and if interest rates decline, the prices of existing bonds rise. Interest rate risk is greater for long-term bonds than it is for short-term bonds, however. Short-term bond funds will have minimal impact from rising rates, and the funds will gradually increase their interest rate as prevailing rates rise.

However, if inflation stays high, the interest rate may not keep up and you&#x;ll lose purchasing power.

Where to get it

You can buy bond funds at many online brokers, namely those that allow you to trade ETFs or mutual funds. Most brokers that offer ETFs allow you to buy and sell them at no commission, while mutual funds may require you to pay a commission or make a minimum purchase, though not always.

4. Series I bonds

The U.S. Treasury issues savings bonds for individual investors, and an interesting option for is the Series I bond. This bond helps build in protection against inflation. It pays a base interest rate and then adds on a component based on the inflation rate. The result: If inflation rises, so does the payout. But the reverse is true: If inflation falls, so will the interest rate. The inflation adjustment resets every six months.

Series I bonds earn interest for 30 years if they are not redeemed for cash.

Best investment for

Like other government-issued debt, Series I bonds are attractive for risk-averse investors who do not want to run any risk of default. These bonds are also a good option for investors who want to protect their investment against inflation. However, investors are limited to buying $10, in any single calendar year, though you can apply up to an additional $5, in your annual tax refund to the purchase of Series I bonds, too.

Risk

The Series I bond protects your investment against inflation, which is a key downside to investing in most bonds. And like other government-issued debt, these bonds are considered among the safest in the world against the risk of default.

Where to get it

You can buy Series I bonds directly from the U.S. Treasury at www.oldyorkcellars.com The government will not charge you a commission for doing so.

5. Short-term corporate bond funds

Corporations sometimes raise money by issuing bonds to investors, and these can be packaged into bond funds that own bonds issued by potentially hundreds of corporations. Short-term bonds have an average maturity of one to five years, which makes them less susceptible to interest rate fluctuations than intermediate- or long-term bonds.

Corporate bond funds can be an excellent choice for investors looking for cash flow, such as retirees, or those who want to reduce their overall portfolio risk but still earn a return.

Best investment for

Short-term corporate bond funds can be good for risk-averse investors who want a bit more yield than government bond funds.

Risk

As is the case with other bond funds, short-term corporate bond funds are not FDIC-insured. Investment-grade short-term bond funds often reward investors with higher returns than government and municipal bond funds.

But the greater rewards come with added risk. There is always the chance that companies will have their credit rating downgraded or run into financial trouble and default on the bonds. To reduce that risk, make sure your fund is made up of high-quality corporate bonds.

Where to get it

You can buy and sell corporate bonds funds with any broker that allows you to trade ETFs or mutual funds. Most brokers allow you to trade ETFs for no commission, whereas many brokers may require a commission or a minimum purchase to buy a mutual fund.

6. S&P index funds

If you want to achieve higher returns than more traditional banking products or bonds, a good alternative is an S&P index fund, though it does come with more volatility.

The fund is based on about five hundred of the largest American companies, meaning it comprises many of the most successful companies in the world. For example, Amazon and Berkshire Hathaway are two of the most prominent member companies in the index.

Like nearly any fund, an S&P index fund offers immediate diversification

There’s more to investing than super and property. Take a look at the different investment options available in Australia which you might consider when creating a portfolio.

While property seems to get the lion’s share of attention when it comes to investing money in Australia,  a study by the Australian Securities Exchange (ASX) revealed that shares, along with other investments traded on an exchange, were in fact the most popular investment choices among Aussies^1,2.

What different assets can you invest in?

If you’re interested in seeing what your investment options are outside investing in property and super, here’s a list of some of the common investment options in Australia you could consider when building your own investment portfolio.

Cash investments

If you put your money into cash investments (such as savings accounts and term deposits), the returns will often be lower in comparison to other investment products. However, these types of investment options typically provide stable, low-risk income in the form of a regular interest payment, so they may be a good option if you’re risk averse or working to a short timeframe.

Fixed interest or fixed income investments

Fixed interest investments (also known as fixed income or bonds) usually have a set investment period (eg five years), and provide predictable income in the form of regular interest payments. They tend to be less risky when compared to other types of investments, so can be used to provide balance and diversity in an investment portfolio. Fixed interest investments are issued by governments and companies in Australia and internationally.

A government bond is one example of a fixed interest investment. It provides the holder with regular interest payments, and once matured, the amount originally invested (known as the principal) can be returned to you. However, the value of the investment doesn’t increase with inflation.

There are also different types of fixed interest investments with different investment timeframes and different risks – for example, a fixed interest investment issued by a company can be risker than one issued by the Australian government.

Shares

If you purchase shares (also known as equities or stocks) in Australian or international companies, you’re essentially buying a piece of that company, making you a shareholder. If the shares of the company grow in value, the value of your investment will also increase, and you may receive a portion of the company’s profits in the form of dividends. However, if the share price falls, the value of your investment will also fall. If you manage the shares yourself, you’ll have to decide when to buy shares, and when to sell them. It’s also worth keeping in mind that you may not receive any dividends at all.

If you’re looking for how to invest in shares, get in touch with an AMP financial adviser who can guide you through the process.

Managed funds

In a managed fund (also known as a managed portfolio), your money is pooled with other investors on your behalf by a fund manager. A managed fund can focus on one asset class, for example, an Australian shares managed fund will only hold shares in Australian companies. Or, it can be a diversified managed fund and include a mix of cash, shares and property. One of the benefits of pooling your assets in this way is that it can also give you the ability to gain access to investments and a level of diversification that isn’t usually obtainable by an individual.

The amount of money you invest is equal to a set number of units, and any growth or earnings are then divided among all investors depending on how many units each investor owns. Any income generated on these earnings will also be subject to tax based on the individual income tax rate of the owner.

Because investment returns are tied to movements in investment markets, it’s important to keep in mind that putting your money into a managed fund won’t necessarily guarantee you a positive investment return.

Exchange traded funds (ETFs)

An ETF is a type of managed fund that can be bought and sold on an exchange, such as the Australian Stock Exchange (ASX), and which tracks a particular asset or market index. ETFs are usually ‘passive’ investment options as the majority of these investment products aim to track an index, and generally don’t try to outperform it. This means the value of your investment in an ETF will go up and down in line with the index it is tracking.

ETFs tend to be easy to buy and sell and have lower fees than some other types of investment products. They form part of a larger class of investment products called exchange traded products, or ETPs, which can be bought and sold on an exchange.

Investment bonds

Like a managed fund, if you decide to put money into an investment or growth bond (also known as an insurance bond), your money will generally be pooled with money from other investors, with an investment manager overseeing the funds and making the day-to-day investment decisions. This makes for a hands-off approach for the investor, which can be helpful if you’re too busy to oversee your investments, or prefer to have a knowledgeable manager making the decisions.

The main point of difference with investment bonds is the way earnings are taxed. If you hold onto an investment bond for at least 10 years, you won’t have to pay additional tax on any profits that you’ve made when you eventually sell (or redeem) your investment. That’s because such investment bonds are seen as ‘tax-paid’ investments, where earnings are taxed within the bond along the way at 30%. If you’re paying more than 30% in income tax, an investment bond may be a tax-effective structure to help you invest.

Annuities

A popular option for retirement, annuities provide a guaranteed income regardless of what’s happening in financial markets³. These can be in the form of a series of regular payments either over a set number of years (fixed-term), or for the remainder of your life (lifetime annuity). The payments you receive will depend on things like the amount you put in and actuarial calculations, which estimate future outcomes by looking at economic and demographic trends.

You can purchase an annuity through your super or with ordinary savings. It’s important to note though, that if you’re using your super money for the purchase, you won’t be able to access the funds until you reach your preservation age and retire.

Listed investment companies (LICs)

LICs are a type of investment vehicle which are incorporated as companies and listed on a stock exchange. Most LICs operate in a similar way to a managed fund with an internal or external manager responsible for selecting and managing the company’s investments on your behalf to provide diversity. LICs commonly invest in shares in other companies.

It’s important to note that LICs are ‘closed-ended’ investments, which means there’s a set amount of shares available that does not change. Shareholders can come and go, but the amount of capital in the LIC doesn’t change as investors change. This means the investment manager can focus on managing the investment, rather than trying to raise funds if a shareholder exits the investment or making additional investments if more investors come on board.

Real estate investment trusts (REITs)

A REIT is a type of property fund listed on a public market, such as the ASX, in which investors can purchase units. Similar to a managed fund, your money in the fund is then pooled and invested in a range of property assets, which may include commercial, retail, industrial, or other property sectors.

REITs can provide investors with exposure to the property market in a way that is more diversified –  commercial and industrial property and potentially more cost-effective – than buying a single property.

Gold

As a precious metal, gold is a commodity that can be bought or sold based on set market value. Some people like to invest in gold as a way to hedge against inflation. However, investing in physical gold bars can be cumbersome. Other ways to invest in gold include buying derivatives, gold receipts, gold ETFs and gold mining stocks.

Emerging trends

Australia’s alternative finance market has grown by 53% in the 12 months to September as investors continue to tap into emerging trends and explore new ways to grow their wealth⁴.

In addition to the investment options listed above, there are a number of emerging trends you might consider when building your wealth.

Peer-to-peer lending (P2P)

P2P lending is a way you can borrow money without going through a traditional lender (such as a bank). It operates by connecting investors with companies or people looking for a loan.

Most P2P lending is run via an online platform that acts as an intermediary between investors and borrowers and charges a fee-for-service. Through the platform, the lender will be able to see what loan they would like to fund, and, the borrower must pay the loan back over time with interest.

Some platforms also allow investors to diversify their investment across other assets (such as a managed fund). The details, including the amount of control a lender has, length of the loan and at what interest rate, varies between P2P providers.

Cryptocurrency

Unlike regular currency like coins and notes, cryptocurrency is a virtual currency that exists as a digital token5. The most well-known type of cryptocurrency is Bitcoin, but there are hundreds of others including Ethereum, Litecoin and Ripple.

Cryptocurrencies are kept in a digital wallet and can be used to pay for real goods and services. Transactions are recorded using a vast digital ledger called a blockchain. It’s most commonly used for online payments but can in some cases can be used in stores. However, because cryptocurrency is not legal tender, it’s not accepted everywhere and is not backed by any government.

Factors to consider when making investment decisions

Before putting your money into any investment option it’s important to make sure you understand, and are comfortable with, the level of risk involved, the investment timeframe, any potential costs involved, and how the product could help you reach your financial goals.

It’s also important to look into any potential legal and tax implications, as these can vary depending on the type of investment you make.

Risks involved with investing

Different types of investments carry different levels of risk which can influence the returns you may receive. People tend to have different appetites for risk, so it’s important to understand yours before investing. The AMP Investment Style calculator can help you to understand your risk appetite..

Generally, investments that carry more risk are better suited to long-term timeframes, as these often come with greater short-term volatility, which means they can change rapidly and unpredictably. However, being too conservative with your investments may make it harder to reach your goals.

Diversification

A good way to manage risk can be to spread your investments across different asset classes. This is known as diversification, and is one of the first things you will learn about when looking into how to invest for beginners.

Diversification reduces your overall investment risk and leaves you less exposed to a single economic event. So if one sector or asset performs badly, the other areas of your investment may not be as badly affected.

It can also be a good idea to diversify within asset classes. For example, a share portfolio may hold shares across different sectors such as banking, resources, healthcare and technology, and across both domestic and international markets.

How to start investing

If you’re interested in building your investment portfolio, you can use these tips to help you get started:

• Do your research – think about how much you can afford to invest, what your options are, and what types of investment products you could use to help you reach your goals.
• Know your risk profile – work out how much risk you’re willing to take and what types of investment products might fit within this. Different investment products carry with them different levels of risk, so it’s important to understand the risk involved in each investment product or strategy you’re considering.
• Speak to an adviser – if you have any questions or want more help or information, speak with your financial adviser. If you don’t have an adviser but would like more information, you can call us on to find an adviser near you.

_{1 ASX, ‘Australian Investor Study ’, pg. 4, figures 2, 3
2 ASIC’s MoneySmart website, ‘Annuities’, www.oldyorkcellars.com
3 PMG, ‘Cultivating Growth: The 2nd Asia Pacific Alternative Finance Industry Report’, 20 September , pg. 71, paragraph 1 
4 ASIC’s MoneySmart website, ‘Cryptocurrencies’, www.oldyorkcellars.com}

Expert advice without breaking the bank

With a NerdWallet Plus subscription, get financial coaching, identity theft protection, and custom budgeting tools — all at a fraction of the cost.

The best way to invest money: A step-by-step guide

1. Give your money a goal

2. Decide how much help you want

Advertisement

NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.	NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.	NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.
Learn More	Learn More	Learn More

3. Pick an investment account

If you're investing for retirement:

4. Open your account

5. Choose investments that match your tolerance for risk

The best investment accounts for you in

Use our Best-Of Awards list to get the year’s best investment accounts for stock trading, IRA investing, and more.

For growth, invest in stocks and stock funds

Am I on track financially? Our investment strategy road map can guide your investing journey.

More resources

How to save tax for FY )

Download The Economic Times News App to get Daily Market Updates & Live Business News.

ETPrime stories of the day

Doubling your money is a badge of honor, often used as bragging rights at parties and around the Thanksgiving dinner table. Spurious promises to double one's money can also be made by overzealous advisors or worse, scamsters and fraudsters. Perhaps the urge to double one's money comes from deep in our investor psychology—the risk-taking part of us that loves the quick buck. When it comes to efforts to do so, however, two critical elements that are interrelated need to be considered: time and risk. This refers both to your (investing) time horizon and risk tolerance, as well as the attributes of the investment itself, such as the time it might take for the investment to double, which in turn is a function of the riskiness of the investment.

Time Horizon and Risk Tolerance

Your investing time horizon is an extremely important determinant of the amount of investment risk you can handle and is generally dependent on your ageand investment objectives. For example, a young professional likely has a long investment horizon, so they can take on a significant amount of risk because time is on their side when it comes to bouncing back from any losses. But what if they're saving to buy a house within the next year? In that case, their risk tolerance will be low because they cannot afford to lose much capital in the event of a sudden market correction, which would jeopardize their primary investment objective of buying a house.

Likewise, conventional investing strategy suggests that people in or near retirement should have their funds deployed in "safe" investments like bonds and bank deposits, but in an era of extremely low interest rates, that strategy carries its own risk, mainly of the loss of purchasing power through inflation. In addition, a retired individual in their 60s with a decent pension and no mortgage or other liabilities would probably have a reasonable amount of risk tolerance.

Let's now turn to the "time and risk" attributes of an investment itself. An investment that has the potential to double your money in a year or two is undoubtedly more exciting than one that may do so in 20 years. The issue here is that an exciting, high-growth investment will almost certainly be far more volatile than a staid, "Steady Eddy" type of investment. The higher the volatility of an investment, the riskier it is. This increased volatility or risk is the price an investor pays for the allure of higher returns.

How long does it take to double one's money?

The Rule of 72 is a well-known shortcut for calculating how long it will take for an investment to double if its growth compounds annually. Just divide 72 by your expected annual rate of return. The result is the number of years it will take to double your money.

When dealing with low rates of return, the Rule of 72 provides a fairly accurate estimate of doubling time. However, that estimate gets less precise at very high return rates, as can be seen in the chart below, which compares the estimates for "time to double" (in years) generated by the Rule of 72 and the actual number of years it would take for an investment to double in value.

Five Ways to Double Your Money

Doubling your money is actually a realistic goal that most investors can strive toward and is not as daunting a prospect as it may seem initially for a new investor. There are a few caveats, however:

• Be very honest with yourself (and your investment advisor, if you have one) about your risk tolerance; finding out you don't have the stomach for volatility when the market plunges 20% is the worst possible time to make this discovery and may prove very detrimental to your financial well-being.
• Don't let the two emotions that drive most investors—greed and fear—have an adverse impact on your investment decisions.
• Be extremely wary about get-rich-quick schemes that promise you "guaranteed" sky-high results with minimal risk, because there's no such thing. Because there are probably many more investment scams out there than there are sure bets, be suspicious whenever you're promised results that appear too good to be true. Whether it's your broker, your brother-in-law, or a late-night infomercial, take the time to make sure that someone is not using you to double their money.

Broadly speaking, there are five ways to double your money. The method you choose depends largely on your appetite for risk and your timeline for investing. You may also consider adopting a mix of these strategies to achieve your goal of doubling your money.

1. The Classic Way—Earning It Slowly

Investors who have been around for a while will remember the classic Smith Barney commercial from the s in which British actor John Houseman informs viewers in his unmistakable accent that "they make money the old-fashioned way—they earn it."

When it comes to the most traditional way of doubling your money, that commercial is not too far from the truth. The time-tested way to double your money over a reasonable amount of time is to invest in a solid, balanced portfolio that's diversified between blue-chip stocks and investment-grade bonds.

The S&P Index—the most widely followed index of blue-chip stocks—has returned about % annually (including dividends) from to , while investment-grade corporate bonds have returned % annually over this year period. Thus, a classic 60/40 portfolio (60% equities, 40% bonds) would have returned about % annually during this time. Based on the Rule of 72, such a portfolio should double in about years, and quadruple in approximately years.

Note, however, that a significant amount of volatility generally accompanies such sterling results. Investors should brace themselves for occasional sharp drawdowns, such as the 35% plunge in the S&P within a six-week period in the first quarter of as the coronavirus pandemic erupted worldwide.

In addition, very high returns compared to the historical norm may reduce the potential for future returns. For example, the S&P recovered from its plunge in record time and powered its way to new record highs by year-end Although it returned a jaw-dropping total return of % from to , such stellar returns may mean that future returns from the S&P may be significantly lower.

What about real estate?

Real estate is another traditional way to build wealth, although it is a far less attractive proposition at times like the present when housing prices in North America have surged to record levels in many regions. The prospect of rising interest rates also reduces the appeal of real estate investment.

That said, during a real estate boom, the prospect of doubling one's money proves irresistible to many investors because the huge amount of leverage provided from mortgage financing can really juice up returns. For example, a 20% down payment on an investment property worth $, would require an investor to plunk down $, and get a mortgage for the balance of $, If the property appreciates 20% to $, in the next few years, the investor now has equity worth $, in it, which represents a doubling of the original $, investment.

2. The Contrarian Way—Blood in the Streets

Even the most unadventurous investor knows that there comes a time when you must buy, not because everyone is getting in on a good thing but because everyone is getting out.

Just as great athletes go through slumps when many fans turn their backs, the stock prices of otherwise great companies occasionally go through slumps, which accelerate as fickle investors bail out. As Baron Rothschild supposedly once said, smart investors "buy when there is blood in the streets, even if the blood is their own."

Nobody is arguing that you should buy garbage stocks. The point is that there are times when good investments become oversold, which presents a buying opportunity for investors who have done their homework.

Valuation metrics used to gauge whether a stock may be oversold include a company's price-to-earnings ratio and book value. Both measures have well-established historical norms for both the broad markets and for specific industries. When companies slip well below these historical averages for superficial or systemic reasons, smart investors smell an opportunity to double their money.

Being contrarian means that one is going against the prevailing trend. It therefore requires a greater degree of risk tolerance and a substantial amount of due diligence and research. As such, a contrarian strategy is best left to very experienced investors and is not recommended for a conservative or inexperienced investor.

3. The Safe Way

Just as the fast lane and the slow lane on the highway will eventually get you to the same place, there are quick and slow ways to double your money. If you prefer to play it safe, bonds can be a less hair-raising journey to the same destination.

Consider zero-coupon bonds, for example. For the uninitiated, zero-coupon bonds may sound intimidating. In reality, they're simple to understand. Instead of purchasing a bond that rewards you with a regular interest payment, you buy a bond at a discount to its eventual value at maturity.

One hidden benefit is the absence of reinvestment risk. With standard coupon bonds, there are the challenges and risks of reinvesting the interest payments as they're received. With zero-coupon bonds, there's only one payoff, and it comes when the bond matures. On the flip side, zero-coupon bonds are very sensitive to changes in interest rates and can lose value as interest rates rise; this is a risk factor to be considered by an investor who does not intend to hold a zero-coupon bond to maturity.

Series EE Savings Bonds issued by the U.S. Treasury are another attractive option for conservative investors who do not mind waiting a couple of decades for the investment to double. Series EE Savings Bonds are low-risk savings products that are only available in electronic form on the TreasuryDirect platform. They pay interest until they reach 30 years or the investor cashes them in, whichever comes first. Although the current rate of interest is a paltry % for bonds issued between November and April , they come with a guarantee that bonds sold now will double in value if held for 20 years. The minimum purchase amount is $25, while the maximum purchase per calendar year is $10, Savings bonds are exempt from state or local taxes, but interest earnings are subject to federal income tax.

4. The Speculative Way

Though slow and steady might work for some investors, others find themselves falling asleep at the wheel. For folks with a high degree of risk tolerance and some investment capital that they can afford to lose, the fastest way to super-size the nest egg may be the use of aggressive strategies such as options, margin trading, penny stocks, and in recent years, cryptocurrencies. All can super-shrink a nest egg just as quickly.

Stock options, such as simple puts and calls, can be used to speculate on any company's stock. For many investors, especially those who have their fingers on the pulse of a specific industry, options can turbocharge a portfolio's performance.

Each stock option potentially represents shares of stock. That means a company's price might need to increase only a small percentage for an investor to hit one out of the park. Just be careful and be sure to do your homework before trying it.

For those who don't want to learn the ins and outs of options but do want to leverage their faith or doubts about a particular stock, there's the option of buying on margin or selling a stock short. Both these methods allow investors to essentially borrow money from a brokerage house to buy or sell more shares than they actually have, which in turn raises their potential profits substantially. This method is not for the faint of heart. A margin call can back you into a corner, and short-selling can generate infinite losses.

Lastly, extreme bargain hunting can turn pennies into dollars. You can roll the dice on one of the numerous former blue-chip companies that have sunk to less than a dollar. Or, you can sink some money into a company that looks like the next big thing. Penny stocks can double your money in a single trading day. Just keep in mind that the low prices of these stocks reflect the sentiment of most investors.

As Bitcoin has grown in popularity and become more mainstream, other cryptocurrencies have also emerged in recent years as one of the favored ways for speculators to make a quick buck. Though Bitcoin surged 60% in , its performance pales in comparison to that of as many as 10 other cryptocurrencies (with a market cap of at least $10 billion) that soared % or more in , such as Ethereum, Cardano, Shiba Inu, Dogecoin, Solana, and Terra (Solana and Terra gained more than 9,% in ). Unfortunately, the cryptocurrency arena is a fertile hunting ground for scamsters, and there are numerous instances of crypto investors losing a great deal of money through fraud. Would-be cryptocurrency investors should therefore take the utmost care when putting their hard-earned money into any cryptocurrency.

5. The Best Way

Though it's not nearly as fun as watching your favorite stock on the evening news, the undisputed heavyweight champ is an employer's matching contribution in a (k) or another employer-sponsored retirement plan. It's not sexy and it won't wow the neighbors, but getting an automatic 50 cents for every dollar you save is tough to beat.

Even better is the fact that the money going into your plan comes right off the top of what your employer reports to the IRS. For most Americans, that means that each dollar invested costs them only 65 to 75 cents.

If you don't have access to a (k) plan, you still can invest in a traditional IRA or a Roth IRA. You won't get a company match, but the tax benefit alone is substantial. A traditional IRA has the same immediate tax benefit as a (k). A Roth IRA is taxed in the year the money is invested, but when it's withdrawn at retirement, no taxes are due on the principal or the profits.

Either is a good deal for the taxpayer. But if you're young, think about that Roth IRA. Zero taxes on your capital gains? That's an easy way to get a higher effective return. If your current income is low, the government will even effectively match some portion of your retirement savings. The Retirement Savings Contributions Credit reduces your tax bill by 10% to 50% of your contribution.

Unsettled, volatile markets can shake your faith in risky investments like stocks. That’s why many investors move their money into safe investments when volatility strikes. More stable, lower-yielding safe investments help protect your cash—and may even provide modest growth in difficult times.

If you’re looking for safe havens from tough markets, these eight safe investments offer lower risk than stocks—not to mention peace of mind for your investments.

High-Yield Savings Accounts

High-yield savings accounts are just about the safest type of account for your money. These Federal Deposit Insurance Corporation (FDIC)-insured bank accounts are highly liquid and immune to market fluctuations. Just keep in mind, if inflation is higher than your annual percentage yield (APY), your money could lose purchasing power.

Interest rates are generally low across the board for deposit accounts—and they’ll stay that way for the foreseeable future. However, you can earn modest returns with the best savings accounts, even if they won’t always keep up with inflation.

Certificates of Deposit

If you don’t need immediate access to your cash but you’d like to earn a bit more than a savings account, certificates of deposit (CDs) are a good choice, says Kevin Matthews, a former financial advisor and the founder of investing education website Building Bread. Plus, CDs enjoy the same FDIC insurance amounts as other types of deposit accounts.

As with savings accounts, CDs are likely to see low rates for the next couple of years. While the rates can be higher on longer-term CDs, remember that they lock your money up, reducing your liquidity, and they generally charge penalties if you withdraw your cash early (usually a few months of interest). While there are no-penalty CDs, these generally come with lower yields.

Gold

Many investors consider gold to be the ultimate safe investment. Just remember, it can experience similar drastic price swings as stocks and other risky assets over the short term. Research suggests that gold may hold its value over the long term.

According to David Stein, a former fund manager and author of the investment education book “Money for the Rest of Us,” there are a few things to keep in mind with gold as a safe investment, depending on your needs.

“It can be a safe haven in that it’s protected against inflation over the long term, but it doesn’t protect you every year,” he says. “It’s a monetary asset, though, so it can help you diversify away from dollar-denominated assets, if that’s what you’re interested in.”

U.S. Treasury Bonds

U.S. Treasury bonds are widely considered the safest investments on earth. Because the United States government has never defaulted on its debt, investors see U.S. Treasuries as highly secure investment vehicles.

“Treasuries have become less attractive recently because of their low yields,” says Matthews. “However, you can get some inflation protection when you choose TIPS, which are inflation-protected Treasury bonds.”

You can buy government bonds directly from the U.S. Treasury or on secondary markets, via an online brokerage platform. Matthews cautions against the secondary market, since resellers often tack on added costs whereas you can buy U.S. Treasuries free of fees at www.oldyorkcellars.com

You can also invest in mutual funds and exchange-traded funds (ETFs) that exclusively hold U.S. Treasuries. This frees you from the complications of purchasing individual bonds and removes the hassle of reselling the on the secondary market if you need cash before the bond matures.

Series I Savings Bonds

If you want to fend off inflation as well as earn an interest rate, check out Series I Savings bonds, government bonds whose yield can’t go below zero. They have a leg up on TIPS, which can actually post negative yields, says Stein.

For I Bonds, “there’s a composite rate of about % for the next six months, which is better than you’d see with many high-yield savings accounts,” Stein says. “Unfortunately, you can only invest $10, a year per Social Security number, although you might be able to get around it by instructing your tax return to be used to purchase I-Bonds in addition to making a separate purchase.”

An important caveat, though: I Bonds earn interest for up to 30 years. You must hold them for at least a year before you can liquidate them with the government, and if you cash them out before you’ve held them for at least five years, you forfeit three months of interest, similar to many CDs.

Corporate Bonds

If you want higher yields, consider corporate bonds. They generally offer more appealing interest rates but also carry more risk as few companies have the repayment record of Uncle Sam.

To ensure you’re making a safe investment, it’s important to review the rating on bonds. Matthews suggests looking at corporate bonds that are rated as investment grade, which usually means a rating of AAA, AA, A and BBB. Anything else might have even higher yields but also much greater risk.

It’s possible to purchase bonds via an online broker, but Matthews warns that many bond transactions charge higher fees than stock transactions.

To avoid fees and reduce the risk any one company defaults, look to bond mutual funds and bond ETFs, which invest in hundreds or thousands of company bonds. Most index-based ETFs and mutual funds will be available without trading fees from most brokerages these days, but it’s important to double check as well as to look out for load fees on mutual funds.

Real Estate

Real estate may be considered a safe investment, depending on local conditions. In addition, real estate may offer pretty decent income—again, depending on local market conditions.

“Whether it’s commercial property or a rental property, you’re likely to get consistent income, keeping you out of stock market ups and downs,” says Matthews.

Long-term real estate appreciation remains relatively low, with a year average of about %. Real estate also comes with a variety of additional costs other safe investments lack, like maintenance fees and property taxes, and it may require a large upfront investment.

Some people may suggest investing in real estate investment trusts (REITs) in order to get exposure to real estate with greater liquidity and lower costs. But REITs are risky assets, and they can’t really be recommended as safe havens for you money in volatile markets.

Preferred Stocks

Preferred stocks are hybrid securities with features of both stocks and bonds. They offer the income potential of bonds, thanks to guaranteed dividend payments, plus the ownership stake and appreciation potential of common stock.

The potential appreciation of preferred stocks cuts both ways, however. You may see stronger increases in market value over time than bonds—as well as larger potential decreases in value when the market falls. So why are they safe investments? Because preferred stock dividends are guaranteed in nearly all cases, meaning you’ll get income no matter what the stock is doing.

“These might not be safe haven investments in the sense of market risk because capital appreciation is an issue in a down market,” Stein says. “However, you might see a degree of income protection because of the higher dividends.”

Bottom Line

There are no such things as completely risk-free investments. Even the safe investments listed above come with risks, like loss of purchasing power over time as inflation rises. The key is to consider your own individual needs and put together a portfolio that offers sufficient stability while still allowing you to take advantage of growth over time.

Unsettled, volatile markets can shake your faith in risky investments like stocks. That’s why many investors move their money into safe investments when volatility strikes. More stable, lower-yielding safe investments help protect your cash—and may even provide modest growth in difficult times.

If you’re looking for safe havens from tough markets, these eight safe investments offer lower risk than stocks—not to mention peace of mind for your investments.

High-Yield Savings Accounts

High-yield savings accounts are just about the safest type of account for your money. These Federal Deposit Insurance Corporation (FDIC)-insured bank accounts are highly liquid and immune to market fluctuations. Just keep in mind, if inflation is higher than your annual percentage yield (APY), your money could lose purchasing power.

Interest rates are generally low across the board for deposit accounts—and they’ll stay that way for the foreseeable future. However, you can earn modest returns with the best savings accounts, even if they won’t always keep up with inflation.

Certificates of Deposit

If you don’t need immediate access to your cash but you’d like to earn a bit more than a savings account, certificates of deposit (CDs) are a good choice, says Kevin Matthews, a former financial advisor and the founder of investing education website Building Bread. Plus, CDs enjoy the same FDIC insurance amounts as other types of deposit accounts.

As with savings accounts, CDs are likely to see low rates for the next couple of years. While the rates can be higher on longer-term CDs, remember that they lock your money up, reducing your liquidity, and they generally charge penalties if you withdraw your cash early (usually a few months of interest). While there are no-penalty CDs, these generally come with lower yields.

Gold

Many investors consider gold to be the ultimate safe investment. Just remember, it can experience similar drastic price swings as stocks and other risky assets over the short term. Research suggests that gold may hold its value over the long term.

According to David Stein, a former fund manager and author of the investment education book “Money for the Rest of Us,” there are a few things to keep in mind with gold as a safe investment, depending on your needs.

“It can be a safe haven in that it’s protected against inflation over the long term, but it doesn’t protect you every year,” he says. “It’s a monetary asset, though, so it can help you diversify away from dollar-denominated assets, if that’s what you’re interested in.”

U.S. Treasury Bonds

U.S. Treasury bonds are widely considered the safest investments on earth. Because the United States government has never defaulted on its debt, investors see U.S. Treasuries as highly secure investment vehicles.

“Treasuries have become less attractive recently because of their low yields,” says Matthews. “However, you can get some inflation protection when you choose TIPS, which are inflation-protected Treasury bonds.”

You can buy government bonds directly from the U.S. Treasury or on secondary markets, via an online brokerage platform. Matthews cautions against the secondary market, since resellers often tack on added costs whereas you can buy U.S. Treasuries free of fees at www.oldyorkcellars.com

You can also invest in mutual funds and exchange-traded funds (ETFs) that exclusively hold U.S. Treasuries. This frees you from the complications of purchasing individual bonds and removes the hassle of reselling the on the secondary market if you need cash before the bond matures.

Series I Savings Bonds

If you want to fend off inflation as well as earn an interest rate, check out Series I Savings bonds, government bonds whose yield can’t go below zero. They have a leg up on TIPS, which can actually post negative yields, says Stein.

For I Bonds, “there’s a composite rate of about % for the next six months, which is better than you’d see with many high-yield savings accounts,” Stein says. “Unfortunately, you can only invest $10, a year per Social Security number, although you might be able to get around it by instructing your tax return to be used to purchase I-Bonds in addition to making a separate purchase.”

An important caveat, though: I Bonds earn interest for up to 30 years. You must hold them for at least a year before you can liquidate them with the government, and if you cash them out before you’ve held them for at least five years, you forfeit three months of interest, similar to many CDs.

Corporate Bonds

If you want higher yields, consider corporate bonds. They generally offer more appealing interest rates but also carry more risk as few companies have the repayment record of Uncle Sam.

To ensure you’re making a safe investment, it’s important to review the rating on bonds. Matthews suggests looking at corporate bonds that are rated as investment grade, which usually means a rating of AAA, AA, A and BBB. Anything else might have even higher yields but also much greater risk.

It’s possible to purchase bonds via an online broker, but Matthews warns that many bond transactions charge higher fees than stock transactions.

To avoid fees and reduce the risk any one company defaults, look to bond mutual funds and bond ETFs, which invest in hundreds or thousands of company bonds. Most index-based ETFs and mutual funds will be available without trading fees from most brokerages these days, but it’s important to double check as well as to look out for load fees on mutual funds.

Real Estate

Real estate may be considered a safe investment, depending on local conditions. In addition, real estate may offer pretty decent income—again, depending on local market conditions.

“Whether it’s commercial property or a rental property, you’re likely to get consistent income, keeping you out of stock market ups and downs,” says Matthews.

Long-term real estate appreciation remains relatively low, with a year average of about %. Real estate also comes with a variety of additional costs other safe investments lack, like maintenance fees and property taxes, and it may require a large upfront investment.

Some people may suggest investing in real estate investment trusts (REITs) in order to get exposure to real estate with greater liquidity and lower costs. But REITs are risky assets, and they can’t really be recommended as safe havens for you money in volatile markets.

Preferred Stocks

Preferred stocks are hybrid securities with features of both stocks and bonds. They offer the income potential of bonds, thanks to guaranteed dividend payments, plus the ownership stake and appreciation potential of common stock.

The potential appreciation of preferred stocks cuts both ways, however. You may see stronger increases in market value over time than bonds—as well as larger potential decreases in value when the market falls. So why are they safe investments? Because preferred stock dividends are guaranteed in nearly all cases, meaning you’ll get income no matter what the stock is doing.

“These might not be safe haven investments in the sense of market risk because capital appreciation is an issue in a down market,” Stein says. “However, you might see a degree of income protection because of the higher dividends.”

Bottom Line

There are no such things as completely risk-free investments. Even the safe investments listed above come with risks, like loss of purchasing power over time as inflation rises. The key is to consider your own individual needs and put together a portfolio that offers sufficient stability while still allowing you to take advantage of growth over time.

Thinking about where to invest £10,? The stock market is your best bet if you want to try to beat rising inflation.

Once you have your emergency fund of between three and six months&#; worth of essential outgoings in an easy access account and have paid off any expensive debt, then you might want to consider investing the rest.

In this article we explain:

This article contains affiliate links that can earn us revenue*

Is investing right for me?

The decision to invest will depend on what else is going on in your life, so here are some things you should think about:

• Do you have an emergency buffer? The recommendation is between three and six months&#; essential outgoings in an easy access savings account, so that you can get your hands on it when you need it.
• Are you planning a big life change such as having a baby or moving house? Make sure you have extra cash in a savings account.
• How much expensive debt, such as money owed on credit cards, do you have? You may well be better off putting your £10, towards that and switching to the best 0% balance transfer credit card.
• Have you considered overpaying your mortgage? It could save hundreds or thousands of pounds in interest.
• Are you about to retire soon or in ill health?

To mitigate risk, it&#;s recommended that you leave your money invested for at least five years. Investing is a good idea in the long run given than most banks offer paltry interest rates on savings accounts that don&#;t nearly beat the rising cost of living, measured by inflation.

Currently inflation in the UK is at %, while the average rate on savings across all banks is just %, with many offering just %.

If investing ticks the boxes, read on, but also check out our Investing for beginners guide.

Is £10, a good investment amount?

Yes, £10, is a good amount to invest. But as we mentioned, the longer you can leave your money invested, the better.

This will give it enough chance to grow and ride out any fluctuations in the stock market.

If you want to find out more about the basic principles of investing then we have produced a free online Investing for beginners course. Check out module onehere.

What is the best way to invest money?

1. Invest for a minimum five years

To get a decent return, you should invest for at least five to ten years. The longer you invest your money, the more time you have to:

• Accrue returns on your investment portfolio
• Ride out any market downturns
• Let your returns compound (grow in a snowball effect over time as returns get reinvested)

2. Choose a low cost platform

Fees can erode your pot over time, so we have outlined some of the best platforms for both cost and customer service here.

According to investment platform Vanguard, if you invested £10, for 30 years, assuming investment growth of 5% a year, your pot would be:

• 2% fee = £24,
• % fee = £37,

Watch out for early exit charges to access money within a few years of investing as well, as these can run into hundreds of pounds.

3. Choose a tax-efficient wrapper

You should use a tax-free wrapper to protect your investment returns from the taxman.

There are different types of tax-free financial products for you to consider, such as:

Within these products, you would then choose what to invest in. Here are tips on how to choose investment funds.

Where is the best place to put £10,?

As mentioned in the previous section, there are tax-free wrappers you should use to invest.

Which one you choose depends on your investment horizon (that is, when you think you might want to cash in the investment):

Short term (between five and ten years):

If you are investing money and think you will want to access it in five to ten years time, one of the best ways to invest £10, is in a stocks and shares ISA.

This is because (unlike a pension), you can access the money at whatever age you want.

Medium term (ten to 30 years):

A stocks and shares ISA is likely to be most suitable. That is unless you will turn 55 within 30 years, in which case a pension might be a better tax wrapper for you.

If you&#;re unsure about the time horizon, you could invest in a pension and a stocks and shares ISA.

Long term(30 plus years):

The best way to invest £10, for the long term is in a pension. It comes with substantial tax perks that will increase your pot size:

• Invest in a pension and you get tax relief from the government
• Workers get free cash from employers if they are invested in a workplace pension scheme

NOTE: You can’t get your hands on a pension until you are 55 (rising to 57 in ). Check out our pensions guide for more on this.

If you are self-employed, consider a self-invested personal pension or ready-made personal pension. Ask your pension provider if you’re allowed to increase your contribution, or even pay a one-off sum into it.

If you are shopping for a pension, Fidelity* is one of our top-rated providers. Find out whyhere.

How to invest £10, wisely

Invest according to your attitude to risk. To work this out you need to consider your “capacity for loss” and your “risk appetite”.

• Capacity for loss = how much you can afford to lose
• Risk appetite = how you feel about losing money

You should ask yourself these questions first:

1. Are you happy for your £10, investment to fall in value every now and then?
2. Do you want higher returns compared to if you’d left your money in cash?
3. Can you resist the urge to panic and sell your investment if it falls below what you paid for it?

If you answered yes to the above, it sounds like you would be comfortable investing. Find out more in our beginner&#;s guide to investing.

How to spread investment risk

Many investment experts recommend a 60/40 mix. That is an investment portfolio invested 60% in equities (company shares) and 40% in bonds.

For higher returns, the best investment for £10, are shares or equity funds (which are made up of shares). You could invest in a tracker fund that mimics the performance of stocks listed on the FTSE , which is a low-cost way of investing in shares.

Remember shares are higher risk than bonds.

The best way to invest £10, is to diversify it across:

• Different asset classes &#; like shares and bonds
• Different sectors and countries &#; like emerging markets (such as India) and developed countries (such as the UK)

Spreading your investments this way can help level out any fluctuations or falls in prices, so you weather the bad times and benefit from the good.

Why not learn more about investing in our free, online, five-part beginners course to investing?

Should I choose a ready-made portfolio?

If you aren&#;t confident enough to buy and sell investments, you could let an investment manager do it for you. It&#;s now possible to invest with low-cost robo-advisers which make all the decisions on your behalf.

Some good examples of robo-advisers include Nutmeg* and Wealthify. We outline the best robo-advisers here.

In order to select a ready-made portfolio, the robo-adviser will ask you a number of questions to establish your:

• Timeframe
• Risk profile
• Investment goals

Robo-advice can be one of the best ways to invest £10, because it is cheaper than the DIY approach.

If you have a larger lump sum, check out our article: How to invest £50,

Which ISA is right for me?

ISAs work best when you pick the right one for your savings goal. Take this short survey to find out which ISA is right for you.

• It only takes a couple of minutes
• No personal details required

How do you double up £10,?

The best way to double £10, is by investing for the long-term, rather than trying to get rich quickly.

Consider what returns you are looking to make and over what time period. But be realistic &#; you are unlikely to double £10, in a few years.

As tempting as it may be when you see some of the promised rates of returns on high-risk products or the rise of bitcoin, these are best avoided. That is, unless you absolutely know the risks and are happy to take them on.

Can you turn £10k into £k?

Yes, this is possible but it would take decades.

You should probably expect investment growth of about 4% every year. So at that rate it would take about 60 years before your £10, pot grew to £,

The key here is to remain invested for a long period of time and invest in assets with a high chance of return (like shares) in order to grow your pot to £,

Another tip is to drip-feed money into your pot over time to give it the best chance of growing. Here&#;s how to invest with little money.

How can I invest ethically?

If you don&#;t want to invest in companies involved in industries like gambling, tobacco or alcohol production, consider ethical investing.

Find out more about this in our guide to ethical investing.

How to review your investments

How to save tax for FY )

Download The Economic Times News App to get Daily Market Updates & Live Business News.

ETPrime stories of the day

To enjoy a comfortable financial future, investing is absolutely essential for most people. As the coronavirus pandemic demonstrated, a seemingly stable economy can be quickly turned on its head, leaving those who weren&#x;t prepared for tough times scrambling for income.

But with bonds and CDs yielding so low, some assets at astronomical valuations and the economy struggling with surging inflation, what are the best investments for investors to make this year? One idea is to have a mix of safer investments and riskier, higher-return ones.

The best investments in

1. High-yield savings accounts
2. Short-term certificates of deposit
3. Short-term government bond funds
4. Series I bonds
5. Short-term corporate bond funds
6. S&P index funds
7. Dividend stock funds
8. Value stock funds
9. Nasdaq index funds
10. Rental housing
11. Cryptocurrency

Why invest?

Investing can provide you with another source of income, fund your retirement or even get you out of a financial jam. Above all, investing grows your wealth &#x; helping you meet your financial goals and increasing your purchasing power over time. Or maybe you&#x;ve recently sold your home or come into some money. It&#x;s a wise decision to let that money work for you.

While investing can build wealth, you&#x;ll also want to balance potential gains with the risk involved. And you&#x;ll want to be in a financial position to do so, meaning you&#x;ll need manageable debt levels, have an adequate emergency fund and be able to ride out the ups and downs of the market without needing to access your money.

There are many ways to invest &#x; from very safe choices such as CDs and money market accounts to medium-risk options such as corporate bonds, and even higher-risk picks such as stock index funds. That&#x;s great news, because it means you can find investments that offer a variety of returns and fit your risk profile. It also means that you can combine investments to create a well-rounded and diversified &#x; that is, safer &#x; portfolio.

Overview: Best investments in

1. High-yield savings accounts

A high-yield online savings account pays you interest on your cash balance. And just like a savings account earning pennies at your brick-and-mortar bank, high-yield online savings accounts are accessible vehicles for your cash. With fewer overhead costs, you can typically earn much higher interest rates at online banks. Plus, you can typically access the money by quickly transferring it to your primary bank or maybe even via an ATM.

A savings account is a good vehicle for those who need to access cash in the near future.

Best investment for

A high-yield savings account works well for risk-averse investors, and especially for those who need money in the short term and want to avoid the risk that they won&#x;t get their money back.

Risk

The banks that offer these accounts are FDIC-insured, so you don&#x;t have to worry about losing your deposit. While high-yield savings accounts are considered safe investments, like CDs, you do run the risk of losing purchasing power over time due to inflation, if rates are too low.

Where to open a savings account

You can browse Bankrate&#x;s list of best high-yield savings accounts for a top rate. Otherwise, banks and credit unions offer a savings account, though you may not get the best rate.

2. Short-term certificates of deposit

Certificates of deposit, or CDs, are issued by banks and generally offer a higher interest rate than savings accounts. And short-term CDs may be better options when you expect rates to rise, allowing you to re-invest at higher rates when the CD matures.

These federally insured time deposits have specific maturity dates that can range from several weeks to several years. Because these are time deposits, you cannot withdraw the money for a specified period of time without penalty.

With a CD, the financial institution pays you interest at regular intervals. Once it matures, you get your original principal back plus any accrued interest. It pays to shop around online for the best rates.

Because of their safety and higher payouts, CDs can be a good choice for retirees who don&#x;t need immediate income and are able to lock up their money for a little bit.

Best investment for

A CD works well for risk-averse investors, especially those who need money at a specific time and can tie up their cash in exchange for a bit more yield than they&#x;d find on a savings account.

Risk

CDs are considered safe investments. But they do carry reinvestment risk &#x; the risk that when interest rates fall, investors will earn less when they reinvest principal and interest in new CDs with lower rates, as we saw in and The opposite risk is that rates will rise and investors won&#x;t be able to take advantage because they&#x;ve already locked their money into a CD. And with rates expected to rise in , it may make sense to stick to short-term CDs, so that you can reinvest at higher rates in the near future.

It&#x;s important to note that inflation and taxes could significantly erode the purchasing power of your investment.

Where to buy a CD

Bankrate&#x;s list of best CD rates will help you find the best rate across the nation, instead of having to rely on what&#x;s available only in your local area. Alternatively, banks and credit unions typically offer CDs, though you&#x;re not likely to find the best rate locally.

3. Short-term government bond funds

Government bond funds are mutual funds or ETFs that invest in debt securities issued by the U.S. government and its agencies. Like short-term CDs, short-term government bond funds don&#x;t expose you to much risk if interest rates rise, as they&#x;re expected to do in

The funds invest in U.S. government debt and mortgage-backed securities issued by government-sponsored enterprises such as Fannie Mae and Freddie Mac. These government bond funds are well-suited for the low-risk investor.

These funds can also be a good choice for beginning investors and those looking for cash flow.

Best investment for

Government bond funds may work well for risk-averse investors, though some types of funds (like long-term bond funds) may fluctuate a lot more than short-term funds due to changes in the interest rate.

Risk

Funds that invest in government debt instruments are considered to be among the safest investments because the bonds are backed by the full faith and credit of the U.S. government.

If interest rates rise, the prices of existing bonds drop; and if interest rates decline, the prices of existing bonds rise. Interest rate risk is greater for long-term bonds than it is for short-term bonds, however. Short-term bond funds will have minimal impact from rising rates, and the funds will gradually increase their interest rate as prevailing rates rise.

However, if inflation stays high, the interest rate may not keep up and you&#x;ll lose purchasing power.

Where to get it

You can buy bond funds at many online brokers, namely those that allow you to trade ETFs or mutual funds. Most brokers that offer ETFs allow you to buy and sell them at no commission, while mutual funds may require you to pay a commission or make a minimum purchase, though not always.

4. Series I bonds

The U.S. Treasury issues savings bonds for individual investors, and an interesting option for is the Series I bond. This bond helps build in protection against inflation. It pays a base interest rate and then adds on a component based on the inflation rate. The result: If inflation rises, so does the payout. But the reverse is true: If inflation falls, so will the interest rate. The inflation adjustment resets every six months.

Series I bonds earn interest for 30 years if they are not redeemed for cash.

Best investment for

Like other government-issued debt, Series I bonds are attractive for risk-averse investors who do not want to run any risk of default. These bonds are also a good option for investors who want to protect their investment against inflation. However, investors are limited to buying $10, in any single calendar year, though you can apply up to an additional $5, in your annual tax refund to the purchase of Series I bonds, too.

Risk

The Series I bond protects your investment against inflation, which is a key downside to investing in most bonds. And like other government-issued debt, these bonds are considered among the safest in the world against the risk of default.

Where to get it

You can buy Series I bonds directly from the U.S. Treasury at www.oldyorkcellars.com The government will not charge you a commission for doing so.

5. Short-term corporate bond funds

Corporations sometimes raise money by issuing bonds to investors, and these can be packaged into bond funds that own bonds issued by potentially hundreds of corporations. Short-term bonds have an average maturity of one to five years, which makes them less susceptible to interest rate fluctuations than intermediate- or long-term bonds.

Corporate bond funds can be an excellent choice for investors looking for cash flow, such as retirees, or those who want to reduce their overall portfolio risk but still earn a return.

Best investment for

Short-term corporate bond funds can be good for risk-averse investors who want a bit more yield than government bond funds.

Risk

As is the case with other bond funds, short-term corporate bond funds are not FDIC-insured. Investment-grade short-term bond funds often reward investors with higher returns than government and municipal bond funds.

But the greater rewards come with added risk. There is always the chance that companies will have their credit rating downgraded or run into financial trouble and default on the bonds. To reduce that risk, make sure your fund is made up of high-quality corporate bonds.

Where to get it

You can buy and sell corporate bonds funds with any broker that allows you to trade ETFs or mutual funds. Most brokers allow you to trade ETFs for no commission, whereas many brokers may require a commission or a minimum purchase to buy a mutual fund.

6. S&P index funds

If you want to achieve higher returns than more traditional banking products or bonds, a good alternative is an S&P index fund, though it does come with more volatility.

The fund is based on about five hundred of the largest American companies, meaning it comprises many of the most successful companies in the world. For example, Amazon and Berkshire Hathaway are two of the most prominent member companies in the index.

Like nearly any fund, an S&P index fund offers immediate diversification

How do you reduce your risk?

The first thing to consider is the time frame over which you're saving. If you're going to need your money within three years, then the stock market isn’t the best place for it as market volatility means your money is unlikely to have enough time to regain any initial drops in value. If you’re wanting a long-term home for your money, then the stock market is likely to outperform cash, so your next consideration is how to reduce your risk.

“The key to minimising your risk is diversification,” says Nersen. Put your eggs into a lot of different baskets then, if one gets dropped, you don’t lose everything. The more you spread your money across asset classes and geographic regions the less risk you face of one market shock wiping out your savings.

You can diversify your own portfolio by carefully picking stocks and investments that cover a broad range of assets, such as stocks, bonds, and gilts and several regions. But, a simpler option may be to invest in a multi-asset fund, which will diversify your investments for you.

Regular portfolio check-ups will also help you with the next step to managing your risk. All investments perform differently, so while you may start out with your money evenly split over five different assets, performance will gradually skew that split. That means you need to regularly rebalance your portfolio so you don’t end up overexposed to one investment. If you invest in multi-asset funds, that rebalancing will be done by the fund manager.

Investing can be tricky, so it's best to speak to a professional financial adviser if you need help. 

There’s more to investing than super and property. Take a look at the different investment options available in Australia which you might consider when creating a portfolio.

While property seems to get the lion’s share of attention when it comes to investing money in Australia,  a study by the Australian Securities Exchange (ASX) revealed that shares, along with other investments traded on an exchange, were in fact the most popular investment choices among Aussies^1,2.

What different assets can you invest in?

If you’re interested in seeing what your investment options are outside investing in property and super, here’s a list of some of the common investment options in Australia you could consider when building your own investment portfolio.

Cash investments

If you put your money into cash investments (such as savings accounts and term deposits), the returns will often be lower in comparison to other investment products. However, these types of investment options typically provide stable, low-risk income in the form of a regular interest payment, so they may be a good option if you’re risk averse or working to a short timeframe.

Fixed interest or fixed income investments

Fixed interest investments (also known as fixed income or bonds) usually have a set investment period (eg five years), and provide predictable income in the form of regular interest payments. They tend to be less risky when compared to other types of investments, so can be used to provide balance and diversity in an investment portfolio. Fixed interest investments are issued by governments and companies in Australia and internationally.

A government bond is one example of a fixed interest investment. It provides the holder with regular interest payments, and once matured, the amount originally invested (known as the principal) can be returned to you. However, the value of the investment doesn’t increase with inflation.

There are also different types of fixed interest investments with different investment timeframes and different risks – for example, a fixed interest investment issued by a company can be risker than one issued by the Australian government.

Shares

If you purchase shares (also known as equities or stocks) in Australian or international companies, you’re essentially buying a piece of that company, making you a shareholder. If the shares of the company grow in value, the value of your investment will also increase, and you may receive a portion of the company’s profits in the form of dividends. However, if the share price falls, the value of your investment will also fall. If you manage the shares yourself, you’ll have to decide when to buy shares, and when to sell them. It’s also worth keeping in mind that you may not receive any dividends at all.

If you’re looking for how to invest in shares, get in touch with an AMP financial adviser who can guide you through the process.

Managed funds

In a managed fund (also known as a managed portfolio), your money is pooled with other investors on your behalf by a fund manager. A managed fund can focus on one asset class, for example, an Australian shares managed fund will only hold shares in Australian companies. Or, it can be a diversified managed fund and include a mix of cash, shares and property. One of the benefits of pooling your assets in this way is that it can also give you the ability to gain access to investments and a level of diversification that isn’t usually obtainable by an individual.

The amount of money you invest is equal to a set number of units, and any growth or earnings are then divided among all investors depending on how many units each investor owns. Any income generated on these earnings will also be subject to tax based on the individual income tax rate of the owner.

Because investment returns are tied to movements in investment markets, it’s important to keep in mind that putting your money into a managed fund won’t necessarily guarantee you a positive investment return.

Exchange traded funds (ETFs)

An ETF is a type of managed fund that can be bought and sold on an exchange, such as the Australian Stock Exchange (ASX), and which tracks a particular asset or market index. ETFs are usually ‘passive’ investment options as the majority of these investment products aim to track an index, and generally don’t try to outperform it. This means the value of your investment in an ETF will go up and down in line with the index it is tracking.

ETFs tend to be easy to buy and sell and have lower fees than some other types of investment products. They form part of a larger class of investment products called exchange traded products, or ETPs, which can be bought and sold on an exchange.

Investment bonds

Like a managed fund, if you decide to put money into an investment or growth bond (also known as an insurance bond), your money will generally be pooled with money from other investors, with an investment manager overseeing the funds and making the day-to-day investment decisions. This makes for a hands-off approach for the investor, which can be helpful if you’re too busy to oversee your investments, or prefer to have a knowledgeable manager making the decisions.

The main point of difference with investment bonds is the way earnings are taxed. If you hold onto an investment bond for at least 10 years, you won’t have to pay additional tax on any profits that you’ve made when you eventually sell (or redeem) your investment. That’s because such investment bonds are seen as ‘tax-paid’ investments, where earnings are taxed within the bond along the way at 30%. If you’re paying more than 30% in income tax, an investment bond may be a tax-effective structure to help you invest.

Annuities

A popular option for retirement, annuities provide a guaranteed income regardless of what’s happening in financial markets³. These can be in the form of a series of regular payments either over a set number of years (fixed-term), or for the remainder of your life (lifetime annuity). The payments you receive will depend on things like the amount you put in and actuarial calculations, which estimate future outcomes by looking at economic and demographic trends.

You can purchase an annuity through your super or with ordinary savings. It’s important to note though, that if you’re using your super money for the purchase, you won’t be able to access the funds until you reach your preservation age and retire.

Listed investment companies (LICs)

LICs are a type of investment vehicle which are incorporated as companies and listed on a stock exchange. Most LICs operate in a similar way to a managed fund with an internal or external manager responsible for selecting and managing the company’s investments on your behalf to provide diversity. LICs commonly invest in shares in other companies.

It’s important to note that LICs are ‘closed-ended’ investments, which means there’s a set amount of shares available that does not change. Shareholders can come and go, but the amount of capital in the LIC doesn’t change as investors change. This means the investment manager can focus on managing the investment, rather than trying to raise funds if a shareholder exits the investment or making additional investments if more investors come on board.

Real estate investment trusts (REITs)

A REIT is a type of property fund listed on a public market, such as the ASX, in which investors can purchase units. Similar to a managed fund, your money in the fund is then pooled and invested in a range of property assets, which may include commercial, retail, industrial, or other property sectors.

REITs can provide investors with exposure to the property market in a way that is more diversified –  commercial and industrial property and potentially more cost-effective – than buying a single property.

Gold

As a precious metal, gold is a commodity that can be bought or sold based on set market value. Some people like to invest in gold as a way to hedge against inflation. However, investing in physical gold bars can be cumbersome. Other ways to invest in gold include buying derivatives, gold receipts, gold ETFs and gold mining stocks.

Emerging trends

Australia’s alternative finance market has grown by 53% in the 12 months to September as investors continue to tap into emerging trends and explore new ways to grow their wealth⁴.

In addition to the investment options listed above, there are a number of emerging trends you might consider when building your wealth.

Peer-to-peer lending (P2P)

P2P lending is a way you can borrow money without going through a traditional lender (such as a bank). It operates by connecting investors with companies or people looking for a loan.

Most P2P lending is run via an online platform that acts as an intermediary between investors and borrowers and charges a fee-for-service. Through the platform, the lender will be able to see what loan they would like to fund, and, the borrower must pay the loan back over time with interest.

Some platforms also allow investors to diversify their investment across other assets (such as a managed fund). The details, including the amount of control a lender has, length of the loan and at what interest rate, varies between P2P providers.

Cryptocurrency

Unlike regular currency like coins and notes, cryptocurrency is a virtual currency that exists as a digital token5. The most well-known type of cryptocurrency is Bitcoin, but there are hundreds of others including Ethereum, Litecoin and Ripple.

Cryptocurrencies are kept in a digital wallet and can be used to pay for real goods and services. Transactions are recorded using a vast digital ledger called a blockchain. It’s most commonly used for online payments but can in some cases can be used in stores. However, because cryptocurrency is not legal tender, it’s not accepted everywhere and is not backed by any government.

Factors to consider when making investment decisions

Before putting your money into any investment option it’s important to make sure you understand, and are comfortable with, the level of risk involved, the investment timeframe, any potential costs involved, and how the product could help you reach your financial goals.

It’s also important to look into any potential legal and tax implications, as these can vary depending on the type of investment you make.

Risks involved with investing

Different types of investments carry different levels of risk which can influence the returns you may receive. People tend to have different appetites for risk, so it’s important to understand yours before investing. The AMP Investment Style calculator can help you to understand your risk appetite..

Generally, investments that carry more risk are better suited to long-term timeframes, as these often come with greater short-term volatility, which means they can change rapidly and unpredictably. However, being too conservative with your investments may make it harder to reach your goals.

Diversification

A good way to manage risk can be to spread your investments across different asset classes. This is known as diversification, and is one of the first things you will learn about when looking into how to invest for beginners.

Diversification reduces your overall investment risk and leaves you less exposed to a single economic event. So if one sector or asset performs badly, the other areas of your investment may not be as badly affected.

It can also be a good idea to diversify within asset classes. For example, a share portfolio may hold shares across different sectors such as banking, resources, healthcare and technology, and across both domestic and international markets.

How to start investing

If you’re interested in building your investment portfolio, you can use these tips to help you get started:

• Do your research – think about how much you can afford to invest, what your options are, and what types of investment products you could use to help you reach your goals.
• Know your risk profile – work out how much risk you’re willing to take and what types of investment products might fit within this. Different investment products carry with them different levels of risk, so it’s important to understand the risk involved in each investment product or strategy you’re considering.
• Speak to an adviser – if you have any questions or want more help or information, speak with your financial adviser. If you don’t have an adviser but would like more information, you can call us on to find an adviser near you.

_{1 ASX, ‘Australian Investor Study ’, pg. 4, figures 2, 3
2 ASIC’s MoneySmart website, ‘Annuities’, www.oldyorkcellars.com
3 PMG, ‘Cultivating Growth: The 2nd Asia Pacific Alternative Finance Industry Report’, 20 September , pg. 71, paragraph 1 
4 ASIC’s MoneySmart website, ‘Cryptocurrencies’, www.oldyorkcellars.com}

Expert advice without breaking the bank

With a NerdWallet Plus subscription, get financial coaching, identity theft protection, and custom budgeting tools — all at a fraction of the cost.

The best way to invest money: A step-by-step guide

1. Give your money a goal

2. Decide how much help you want

Advertisement

NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.	NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.	NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.
Learn More	Learn More	Learn More

3. Pick an investment account

If you're investing for retirement:

4. Open your account

5. Choose investments that match your tolerance for risk

The best investment accounts for you in

Use our Best-Of Awards list to get the year’s best investment accounts for stock trading, IRA investing, and more.

For growth, invest in stocks and stock funds

Am I on track financially? Our investment strategy road map can guide your investing journey.

More resources

Thinking about where to invest £10,? The stock market is your best bet if you want to try to beat rising inflation.

Once you have your emergency fund of between three and six months&#; worth of essential outgoings in an easy access account and have paid off any expensive debt, then you might want to consider investing the rest.

In this article we explain:

This article contains affiliate links that can earn us revenue*

arts degrees that make money a tree in the shape of a pound sign">

Is investing right for me?

The decision to invest will depend on what else is going on in your life, so here are some things you should think about:

• Do you have an emergency buffer? The recommendation is between three and six months&#; essential outgoings in an easy access savings account, so that you can get your hands on it when you need it.
• Are you planning a big life change such as having a baby or moving house? Make sure you have extra cash in a savings account.
• How much expensive debt, such as money owed on credit cards, do you have? You may well be better off putting your £10, towards that and switching to the best 0% balance transfer credit card.
• Have you considered overpaying your mortgage? It could save hundreds or thousands of pounds in where can i invest my money safely you about to retire soon or in ill health?

To mitigate risk, it&#;s recommended that you leave your money invested for at least five years. Investing is a good idea in the long run given than most banks offer paltry interest rates on savings accounts that don&#;t nearly beat the rising cost of living, measured by inflation.

Currently inflation in the UK is at %, while the average rate on savings across all banks is just %, with many offering just %.

If investing ticks the boxes, read on, but also check out our Investing for beginners guide.

Is £10, a good investment amount?

Yes, £10, is a good amount to invest. But as we mentioned, the longer you can leave your money invested, the better.

This will give it enough chance to grow and ride out where can i invest my money safely fluctuations in the stock market.

If you want to find out more about the basic principles of investing then we have produced a free online Investing for beginners course. Check out module onehere.

What is the best way to invest money?

1. Invest for a minimum five years

To get a decent return, you should invest for at least five to ten years, where can i invest my money safely. The longer you invest your money, the more time you have to:

• Accrue returns on your investment portfolio
• Ride out any market downturns
• Let your returns compound (grow in a snowball effect over time as returns get reinvested)

2. Choose a low cost platform

Fees can erode your pot over time, so we have outlined some of the best platforms for both cost and customer service here.

According to investment platform Vanguard, if you invested £10, for 30 years, assuming investment growth of 5% a year, your pot would be:

• 2% fee = £24,
• % fee = £37,

Watch out for early exit charges to access money within a few years of investing as well, as these can run into hundreds of pounds.

3. Choose a tax-efficient wrapper

You should use a tax-free wrapper to protect your investment where can i invest my money safely from the taxman.

There are different types of tax-free financial products for you to consider, such as:

Within these products, you would then choose what to invest in. Here are tips on how to choose investment funds.

Where is the best place to put £10,?

As mentioned in the previous section, there are tax-free wrappers you should use to invest, where can i invest my money safely.

Which one you choose depends on your investment horizon (that is, when you think you might want to cash in the investment):

Short term (between five and where can i invest my money safely years):

If you are investing money and think you will want to access it in five to ten years time, one of the best ways to invest £10, is in a stocks and shares ISA.

This is because (unlike a pension), you can access the money at whatever age you want.

Medium term (ten to 30 years):

A stocks and shares ISA is likely to be most suitable. That is unless you will turn 55 within 30 years, in which case a pension institutional investor money flow be a better tax wrapper for you.

If you&#;re unsure about the time horizon, you could invest in a pension and a stocks and shares ISA.

Long term(30 plus years):

The best way to invest £10, where can i invest my money safely, for the long term is in a pension. It comes with substantial tax perks that will increase your pot size:

• Invest in where can i invest my money safely pension and you get tax relief from the government
• Workers get free cash from employers if they are invested in a workplace pension scheme

NOTE: You can’t get your hands on a pension until you are 55 (rising to 57 in ). Check out our pensions guide for more on this.

If you are self-employed, consider a self-invested personal pension shake your money maker ready-made personal pension. Ask your pension provider if you’re allowed to increase your contribution, or even pay a one-off sum into it.

If you are shopping for a pension, Fidelity* is one of our top-rated providers. Find out whyhere.

How to invest £10, wisely

Invest according to your attitude to risk. To work this out you need to consider your “capacity for loss” and your “risk appetite”.

• Capacity for loss = how much you can afford to lose
• Risk appetite = how you feel about losing money

You should ask yourself these questions first:

1. Are you happy for your £10, investment to fall in value every now and then?
2. Do you want higher returns compared to if you’d left your money in cash?
3. Can you resist the urge to panic and sell your investment if it falls below what you paid for it?

If you answered yes to the above, it sounds like you would be comfortable investing. Find out more in our beginner&#;s guide to investing.

How to spread investment risk

Many investment experts recommend a 60/40 mix. That is an investment portfolio invested 60% in equities (company shares) and 40% in bonds.

For higher returns, the best investment for £10, are shares or equity funds (which are made up of shares). You could invest in a tracker fund that mimics the high-risk investments of stocks listed on the FTSEwhich is a low-cost way of investing in shares.

Remember shares are higher risk than bonds.

The best way to invest £10, is to diversify it across:

• Different asset classes &#; like shares and bonds
• Different sectors and countries &#; like emerging markets (such as India) and developed countries (such as the UK)

Spreading your investments this way can help level out any fluctuations or falls in prices, so you weather the bad times and benefit from the good.

Why not learn more about investing in our free, online, five-part beginners course to investing?

Should I choose a ready-made portfolio?

If you aren&#;t confident enough to buy and sell investments, you could let an investment manager do it for you. It&#;s now possible to invest with low-cost robo-advisers which make all the decisions on your behalf.

Some good examples of robo-advisers include Nutmeg* and Wealthify. We outline the best robo-advisers here.

In order to select a ready-made portfolio, the robo-adviser will ask you a number of questions to establish your:

• Timeframe
• Risk profile
• Investment goals

Robo-advice can be one of the best ways to invest £10, invest now or wait july 2022 it is cheaper than the DIY approach.

If you have a larger lump sum, check out our article: How to invest £50,

Which ISA is right for me?

ISAs work best when you pick the right one for your savings goal. Take this short survey to find out which ISA is right for you.

• It only takes a couple of minutes
• No personal details required

How do you double up £10,?

The best way to double £10, is by investing for the long-term, rather than trying to get rich quickly.

Consider what returns you are looking to make and over what time period. But be realistic &#; you are unlikely to double £10, in a few years.

As tempting as it may be when you see some of the promised rates of returns on high-risk products or the rise of bitcoin, these are best avoided. That is, unless you absolutely know the risks and are where can i invest my money safely to take them on.

Can you turn £10k into £k?

Yes, this is possible but it would take decades, where can i invest my money safely.

You should probably expect investment growth of about 4% every year. So at that rate it would take about 60 years before your £10, pot grew to £,

The key here is to remain invested for a long period of time and invest in assets with a high chance of return (like shares) in order to grow your pot to £,

Another tip is to drip-feed money into your pot over time to give it the best chance of growing. Here&#;s how to invest with little money.

How can I invest ethically?

If you don&#;t want to invest in companies involved in industries like gambling, tobacco or alcohol production, consider ethical investing.

Find out more about this in our guide to ethical investing.

How to review your investments

How do you reduce your risk?

The first thing to consider is the time frame over which you're saving. If you're going to need your money within three years, where can i invest my money safely the stock market isn’t the best place for it as market volatility means your money is unlikely to have enough time to regain any initial drops in value. If you’re wanting a long-term home for bitcoin investors forum definition money, then the stock market is likely to outperform cash, so your next consideration is how to reduce your risk.

“The key to minimising your risk is diversification,” says Nersen. Put your eggs into a lot of different baskets then, if one gets dropped, you don’t lose everything. The more you spread your money across asset classes and geographic regions the less risk you face of one market shock wiping out your savings.

You can diversify your own portfolio by carefully picking stocks and investments that cover a broad range of assets, such as stocks, bonds, and gilts and several regions. But, a simpler option may be to invest in a multi-asset fund, which will diversify your investments for you.

Regular portfolio check-ups will also help you with the next step to managing your risk. All investments perform differently, so while you may start out with your money evenly split over five different assets, performance will gradually skew that split. That means you need to regularly rebalance your portfolio so you don’t end up overexposed to one investment. If you invest in multi-asset funds, that rebalancing will be done by the fund manager.

Investing can be tricky, so it's best to speak to a professional financial adviser if you need help. 

To enjoy a comfortable financial future, investing is absolutely essential for most people. As the coronavirus pandemic demonstrated, a seemingly stable economy can be quickly turned on its head, leaving those who weren&#x;t prepared for tough times scrambling for income.

But with bonds and CDs yielding so low, some assets at astronomical valuations and the economy struggling with surging inflation, what are the best investments for investors to make this year? One idea is to have a mix of safer investments and riskier, higher-return ones.

The best investments in

1. High-yield savings accounts
2. Short-term certificates of deposit
3. Short-term government bond funds
4. Series I bonds
5. Short-term corporate bond funds
6. S&P index funds
7. Dividend stock funds
8. Value stock funds
9. Nasdaq index funds
10. Rental housing
11. Cryptocurrency

Why invest?

Investing can provide you with another source of income, fund your retirement or even get you out of a financial jam. Above all, investing grows your wealth &#x; helping you meet your financial goals and increasing your purchasing power over time. Or maybe you&#x;ve recently sold your home or come into some money. It&#x;s a wise decision to let that money work for you.

While bitcoin investor ervaringen plus can build wealth, where can i invest my money safely, you&#x;ll also want to balance potential gains with the risk involved. And you&#x;ll want to be in a financial position to do so, meaning you&#x;ll need manageable debt levels, have an adequate emergency fund and be able to ride out the ups and downs of the market without needing to access your money.

There are many ways to invest &#x; from very safe choices such as CDs and money market accounts to medium-risk options such as corporate bonds, and even higher-risk picks such as stock index funds. That&#x;s great news, because it means you can find investments that offer a variety of returns and fit your risk profile. It also means that you can combine investments to create a well-rounded and diversified &#x; that is, safer &#x; portfolio.

Overview: Best investments in

1. High-yield savings accounts

A high-yield online savings account schnell geld verdienen apps you where can i invest my money safely on your cash balance. And just like a savings account earning pennies at your brick-and-mortar bank, high-yield online savings accounts are accessible vehicles for your cash. With fewer overhead costs, you can typically earn much higher interest rates at online banks. Plus, you can typically access the money by quickly transferring it to your primary bank or maybe even via an ATM.

A savings account is a good vehicle for those who need to access cash in the near future.

Best investment for

A high-yield savings account works well for risk-averse investors, and especially for those who need money in the short term and want to avoid the risk that they won&#x;t get their money back.

Risk

The banks that offer these accounts are FDIC-insured, so you don&#x;t have to worry about losing your deposit. While high-yield savings accounts are considered safe investments, like CDs, you do run the risk of losing purchasing power over time due to inflation, if rates are too low.

Where to open a savings account

You can where can i invest my money safely Bankrate&#x;s list of best high-yield savings accounts for a top rate. Otherwise, banks and credit unions offer a savings account, though you may not get the best rate.

2. Short-term certificates of deposit

Certificates of deposit, or CDs, are issued by banks and generally offer a higher interest rate than savings accounts. And short-term CDs may be better options when you expect rates to rise, allowing you to re-invest at higher rates when the CD matures.

These federally insured time deposits have specific maturity dates that can range from several weeks to several years. Because these are time deposits, you cannot withdraw where can i invest my money safely money for a specified period of time without penalty.

With a CD, the financial institution pays you interest at regular intervals. Once it matures, you get your original principal back plus any accrued interest. It pays to shop around online for the best rates.

Because of their safety and higher payouts, CDs can be a good choice for retirees who don&#x;t need immediate income and are able to lock up their money for a little simcity deluxe iphone how to make money investment for

A CD works well for risk-averse investors, especially those who need money at a specific time and can tie up their cash in exchange for a bit more yield than they&#x;d find on a savings account.

Risk

CDs are considered safe investments. But they do carry reinvestment risk &#x; the risk that when interest rates fall, investors will earn less when they reinvest principal and interest in new CDs with lower rates, where can i invest my money safely, as we saw in and The opposite risk is that rates will rise and investors won&#x;t be able to take advantage because they&#x;ve already locked their money into a CD. And with rates expected to rise init may make sense to stick to short-term CDs, so that you can reinvest at higher rates in the near future.

It&#x;s important to note that inflation and taxes could significantly erode the purchasing power of your investment.

Where to buy a CD

Bankrate&#x;s list of best CD rates will help you find the best rate across the nation, instead of having to rely on what&#x;s available only in your local area. Alternatively, banks and credit unions typically offer CDs, though you&#x;re not likely to find the best rate locally.

3. Short-term government bond funds

Government bond funds are mutual funds or ETFs that invest in debt securities issued by the U.S. government and its agencies. Like short-term CDs, short-term government bond funds don&#x;t expose you to much risk if interest rates rise, as they&#x;re expected to do in

The funds invest in U.S. government debt and mortgage-backed securities issued by government-sponsored enterprises such as Fannie Mae and Freddie Mac. These government bond funds are well-suited for the low-risk investor.

These funds can also be a good choice for beginning investors and those looking for cash flow.

Best investment for

Government bond funds may work well for risk-averse investors, though some types of funds (like long-term bond funds) may fluctuate a lot more than short-term funds due to changes in the interest rate.

Risk

Funds that invest in government debt instruments are considered to be among the safest investments because the bonds are backed by the full faith and credit of the U.S. government.

If interest rates rise, the prices of existing bonds drop; and if interest rates decline, the prices of existing bonds rise. Interest rate risk is greater for long-term bonds than it is for short-term bonds, however. Short-term bond funds will have minimal impact from rising rates, and the funds will gradually increase their interest rate as prevailing rates rise.

However, if inflation stays high, the interest rate may not keep up and you&#x;ll lose purchasing power.

Where to get it

You can buy bond funds at many online brokers, namely those that allow you to trade ETFs or mutual funds. Most brokers that offer ETFs allow you to buy and sell them at no commission, while mutual funds may require you to pay a commission or make a minimum purchase, though not always.

4. Series I bonds

The U.S. Treasury issues savings bonds for individual investors, and an interesting option for is the Series I bond. This bond helps build in protection against inflation. It pays a base bitcoin investition per rate and then adds on a component based on the inflation rate. The result: If inflation rises, so does the payout. But the reverse is true: If inflation falls, so will the interest rate. The inflation adjustment resets every six months.

Series I bonds earn interest where can i invest my money safely 30 years if they are not redeemed for cash.

Best investment for

Like other government-issued debt, Series I bonds are attractive for risk-averse investors who do not want to run any risk of default. These bonds are also a good option for investors who want to protect their investment against inflation. However, investors are limited to buying $10, in any single calendar year, though you can apply up to an additional $5, in your annual tax refund to the purchase of Series I bonds, too.

Risk

The Series I bond protects your investment against inflation, which is a key downside to investing in most bonds. And like other government-issued debt, these bonds are considered among the safest in the world against the risk of default.

Where to get it

You can buy Series I bonds directly from the U.S. Treasury at www.oldyorkcellars.com The government will not charge you a commission for doing so.

5. Short-term corporate bond funds

Corporations sometimes raise money by issuing bonds to investors, and these can be packaged into bond funds that own bonds issued by potentially hundreds of corporations. Short-term bonds have an average maturity of one to five years, which makes them less susceptible to interest rate fluctuations than intermediate- or long-term bonds.

Corporate bond funds can be an excellent choice for investors looking for cash flow, such as retirees, or those who bitcoin investition site to reduce their overall portfolio risk but still earn a return.

Best investment for

Short-term corporate bond funds can be good for risk-averse investors who want a bit more yield than government bond funds.

Risk

As is earn one bitcoin per day case with other bond funds, short-term corporate bond funds are not FDIC-insured. Investment-grade short-term bond funds often reward investors with higher returns than government and municipal bond funds.

But the greater rewards come with added risk. There is always the chance that companies will have their credit rating downgraded or run into financial trouble and default on the bonds. To reduce that risk, make sure your fund is made up of high-quality corporate bonds.

Where to get it

You can buy and sell corporate bonds funds with any broker that allows you to trade ETFs or mutual funds. Most brokers allow you to trade ETFs for no commission, whereas many brokers may require a commission or a minimum purchase to buy a mutual fund.

6. S&P index funds

If you want to achieve higher returns than more traditional banking products or bonds, a good alternative is an S&P index fund, though it does come with more volatility.

The fund is based on about five hundred of the largest American companies, meaning it comprises many of the most successful companies in the world. For example, Amazon and Berkshire Hathaway are two of the most prominent member companies in the index.

Like nearly any fund, an S&P index fund offers immediate diversification

Unsettled, where can i invest my money safely, volatile markets can shake your faith in risky investments like stocks. That’s why many investors move their money into safe investments when volatility strikes. More stable, lower-yielding safe investments help protect your cash—and may even provide modest growth in difficult times.

If you’re looking for safe havens from tough markets, these eight safe investments offer lower risk than stocks—not to mention peace of mind for your investments.

High-Yield Savings Accounts

High-yield savings accounts are just about the safest type of account for your money. These Federal Deposit Insurance Corporation (FDIC)-insured bank accounts are highly liquid and immune to market fluctuations. Just keep in mind, if inflation is higher than your annual percentage yield (APY), your money could lose purchasing power.

Interest rates are generally low across the board for deposit accounts—and they’ll stay that way for the foreseeable future. However, you can earn modest returns with the best savings accounts, where can i invest my money safely, even if they won’t always keep up with inflation.

Certificates of Deposit

If you don’t need immediate access to your cash but you’d like to earn a bit more than a savings account, where can i invest my money safely, certificates of deposit (CDs) are a good choice, says Kevin Matthews, a former financial advisor and the founder of investing education website Building Bread. Plus, CDs enjoy the same FDIC insurance amounts as other types of deposit accounts.

As with savings accounts, CDs are likely to see low rates for the next couple of years. While the rates can be higher on longer-term CDs, remember that they lock your money up, reducing your liquidity, and they generally charge penalties if you withdraw your cash early where can i invest my money safely a few months of interest). While there are no-penalty CDs, these generally come with lower yields.

Gold

Many investors consider gold to be the ultimate safe investment. Just remember, it can experience similar drastic price swings as stocks and other risky assets over the short term. Research suggests that gold may hold its value over the long term.

According to David Stein, a former fund manager and author of the investment education book “Money for the Rest of Us,” there are a few things to keep in mind with gold as a safe investment, depending on your needs.

“It can be a safe haven in that it’s protected against inflation over the long term, but it doesn’t protect you every year,” he says. “It’s a monetary asset, though, so it can help you diversify away from dollar-denominated assets, if that’s what you’re interested in.”

U.S, where can i invest my money safely. Treasury Bonds

U.S. Treasury bonds are widely considered the safest investments on earth. Because the United States government has never defaulted on its debt, investors see U.S. Treasuries as highly secure investment vehicles.

“Treasuries have become less attractive recently because of their low yields,” says Matthews. “However, you can get some inflation protection when you choose TIPS, which are inflation-protected Treasury bonds.”

You can buy government bonds directly from the U.S. Treasury or on secondary markets, via an online brokerage platform. Matthews cautions against the secondary market, where can i invest my money safely, since resellers often tack on added costs whereas you can buy U.S. Treasuries free of fees at www.oldyorkcellars.com

You can also invest in mutual funds and exchange-traded funds (ETFs) that exclusively hold U.S. Treasuries. This frees you from the complications of purchasing individual bonds and removes the hassle of reselling the on the secondary market if you need cash before the bond matures.

Series I Savings Bonds

If you want to fend off inflation as well as earn an interest rate, check out Series I Savings bonds, government bonds whose yield can’t go below zero. They have a leg up on TIPS, which can actually post negative yields, says Stein.

For I Bonds, “there’s a composite rate of about % for the next six months, which is better than you’d see with many high-yield savings accounts,” Stein says. “Unfortunately, you can only invest $10, a year per Social Security number, although you might be able to get around it by do blog sites make money your tax return to be used to purchase I-Bonds in addition to making a separate purchase.”

An important caveat, though: I Bonds earn interest for up to 30 years. You must hold them for at least a year before you can liquidate them with the government, and if you cash them out before you’ve held them for at least five years, you forfeit three months of interest, similar to many CDs.

Corporate Bonds

If you want higher yields, consider corporate bonds. They generally offer more appealing interest rates but also carry more risk as few companies have the repayment record of Uncle Sam.

To ensure you’re making a safe investment, it’s important to review the rating on bonds. Matthews suggests looking at corporate bonds that are rated as investment grade, which usually means a rating of AAA, AA, A and BBB. Anything else might have even higher yields but also much greater risk.

It’s possible to purchase bonds via an online broker, but Matthews warns that many bond transactions charge higher fees than stock transactions.

To avoid fees and reduce the risk any one company defaults, look to bond mutual funds and bond ETFs, which invest in hundreds or thousands of company bonds. Most index-based ETFs and mutual funds will be available without trading fees from most brokerages these days, but it’s important to double check as well as to look out for load fees on mutual funds.

Real Estate

Real estate may be considered a safe investment, depending on local conditions. In addition, real estate may offer pretty decent income—again, depending on local market conditions.

“Whether it’s commercial property or a rental property, you’re likely to get consistent income, keeping where can i invest my money safely out of stock market ups and downs,” says Matthews.

Long-term real estate appreciation remains relatively low, with a year average of about %, where can i invest my money safely. Real estate also comes with a variety of additional costs other safe investments lack, like maintenance fees and property taxes, where can i invest my money safely, and it may require a large upfront investment.

Some people may suggest investing in real estate investment trusts (REITs) in order to get exposure to real estate with greater liquidity and lower costs. But REITs are risky assets, and they can’t really be recommended as safe havens for you money in volatile markets.

Preferred Stocks

Preferred stocks are hybrid securities with features of both stocks and bonds. They offer the income potential of bonds, thanks to guaranteed dividend payments, plus the ownership stake and appreciation potential of common stock.

The potential appreciation of preferred stocks cuts both ways, however. You may see stronger increases in market value over time than bonds—as well as larger potential decreases in value when the market falls. So why are they safe investments? Because preferred stock dividends are guaranteed in nearly all cases, meaning you’ll get income no matter what the stock is doing.

“These might not be safe haven investments in the sense of market risk because capital appreciation is an issue in a down market,” Stein says. “However, you might see a degree of income protection because of the higher dividends.”

Bottom Line

There are no such things as completely risk-free investments. Even the safe investments listed above come with risks, like loss of purchasing power over time as inflation rises. The key is to consider your own individual needs and put together a portfolio that offers sufficient where can i invest my money safely while still allowing you to take advantage of growth over time.

Investing / Strategy

ferrantraite / www.oldyorkcellars.com

A high return is what every investor is after, but it’s not the only factor that matters. When reviewing investments, professionals look not only at absolute return potential but also something called “risk-adjusted return.” The bottom line is that not all returns are created equal, and smart investors look to invest where they’re getting the best value for the risk that they are taking on — even if that means accepting lower returns.

Follow Along: 31 Days of Living Richer
Stay in the Know: 27 Best Strategies To Get the Most Out of Your (k)

Through that lens, you might prefer an investment that pays just 2% a year over one that’s returning 20%. Why? Because if that 2% return is guaranteed, such as via a U.S. Treasury, but the path to the 20% return involves the risk of losing 40%, that steady 2% could be a better value over time, based on its low risks — especially for a risk-averse investor.

For the individual investor, this balance is all the more important. If you understand how comparing investments requires looking at both returns and the risk with equal weight, you can understand how even a tiny return can be a great deal if the investment is really risk-free.

9 Safe Investments With High Returns

Here’s a closer look at some of the safest investments with the highest returns. You’re unlikely to generate exponential growth with these, but you’re even less likely to lose the money you’re relying on to keep you and your family secure.

1. High-Yield Savings Accounts

The high-yield savings account is pretty much the gold where can i invest my money safely of safe investments, offering you strong returns given the total absence of risk. The money you have stashed in almost any bank is insured by the Federal Deposit Insurance Corporation, meaning the government will make you whole on any losses up to $,

Changing Rates

One of the few catches with high-yield savings accounts is that the rate can change in response to current market conditions. When rates are falling, as they have been the past few years, payouts can seem not as attractive.

Currently, top high-yield savings accounts pay a range of interest rates, from %%, which is a far cry from the 2%-plus of just a few years ago. However, with the national average savings rate hovering at just % as of Jan. 18, high-yield savings accounts are still a great deal.

Although perhaps not as exciting as potential stock market returns, high-yield savings accounts are very liquid investments, meaning it’s easy to access without penalty if you need it quickly. That makes stashing your emergency fund — something you better have if you’re really looking to limit your financial risk — a pretty decent investment under the circumstances.

Bottom Line: Federal Deposit Insurance Corp. insurance means your money is % safe. It’s easy to get a hold of in a pinch, and rates are well above the national average savings account rate.

Best For: What is the best investment firm in canada your emergency fund; investors looking for options without any risks

Learn: Budgeting How To Create a Budget You Can Live With

2. Certificates of Deposit

Certificates of deposit are almost identical to savings accounts. Most are FDIC insured and so there’s zero risk involved. However, they are still liquid.

With a CD, you accept a time horizon when you invest — usually anywhere from one month to up to 10 years. Although a few CDs allow you to withdraw the money early without consequence, you generally must pay a penalty if you access your cash before the CD term ends. On the one hand, that makes CDs much less valuable for your emergency fund or savings.

On the other, it should mean you’ll get paid a higher rate of return in exchange for that loss of easy access. Basically, where can i invest my money safely, banks will have an easier time reinvesting your savings if you’ve promised to leave them alone for a set amount of time. In return, you should be getting a better rate.

Before you get a CD, consider the following:

1. Whether or not you might need that money before the CD’s maturation date. If the answer is yes, you’ll want to look elsewhere.
2. Whether you really are getting a better interest rate than where can i invest my money safely available with high-yield savings accounts. Your only advantage with a CD over a savings account is getting better returns, so if you can find a savings account that pays better than the CD at your banks, there’s just no point.

That said, an FDIC-insured CD’s returns might seem modest, but they’re pretty stellar in the context of the near-total absence of any risk to you of losing money.

Bottom Line: CDs should offer higher returns than most savings accounts, but that comes at a loss of flexibility as you’ll owe a penalty for pulling your money out early.

Best For: Money you can be sure you won’t need for the prescribed time frame; investors with a stable financial picture looking to avoid any risk in their investments

3. Money Market Accounts

Money market accounts operate on similar principles to the CD or savings account. They usually offer better rates than savings accounts, but they also come with more liquidity and might even let you write checks or use a debit card with the account, allowing for greater flexibility when used alongside a savings account.

If you’re using the account just to make deposits and write a monthly rent check, for instance, the MMA could be ideal. However, it has everything to do bitcoin investir 5 de the return, so shop around and compare the options not just with other money market accounts but with CDs and high-yield savings accounts as well.

Also, where can i invest my money safely, note that the main caveat with a money market account is that you’re limited by law to six transactions a month. Exceed that and you’ll be fined; expected bitcoin value 2022 exceeding it and the bank will have to convert your account to a checking account, or perhaps even close your account.

Bottom Line: Money market accounts are very similar to savings accounts but offer the option to write a limited number of checks each month.

Best For: Money you might need to use infrequently; investors looking for a little more flexibility than their savings account offers

Good To Know

The FDIC insurance limit of $, is applied per bank, per person — not for each account. So, if you have a savings account, CD and MMA at the same bank that have a combined $, in them, you’re not insured on $50, of that money.

4. Treasury Bonds

Even though a % return on a high-yield savings account is more than you’re likely to get at your bank, you will probably need at least some investments that are taking a bit more risk if you want to build a strong portfolio. The next tier up from banking products in terms of higher risk and higher returns are bonds, which are essentially structured loans made to a large organization

Treasury bonds, also known as T-bonds, are guaranteed by the full faith and credit of the U.S. government depending on how long they take to mature. On your end, treasuries will act just like a CD in many ways. Here’s how it works:

• You invest with a set interest rate and a date of maturity anywhere from one month to 30 years from where can i invest my money safely you buy the bond.
• You’ll get regular “coupon” payments for the interest while you hold it and then your principal is returned when the bond matures.

While your coupon payments are completely predictable and secure, the face value of your bonds will rise and fall over time based on the prevailing interest rates, stock market performance and any number of other factors. Granted, that could work out in your favor, but only because you’ve taken on additional risk. So, if you aren’t reasonably certain you can hold the bond to maturity, they’re definitely a riskier investment.

Keep in Mind

Unlike a CD, you can’t pull out your money before the maturity date, not even for a penalty. That doesn’t mean you’re stuck — you can easily go out and sell the bond on the secondary market. But at that point, you’ve gone from buying and holding treasuries to maturity, which tends to be incredibly safe, to trading bonds — vastly less safe. 

Bottom Line: Debt issued by the Treasury is backed by the full faith and credit of the U.S. government, making it similarly as free from risk as FDIC-insured bank accounts.

Best For: Money you know you won’t need prior to the maturity date of the bond; funds in excess of the $, insured by the FDIC; investors willing to give up some flexibility in search of slightly better returns

5. Treasury Inflation-Protected Securities

Many people turn to Treasury Inflation-Protected Securities, or TIPS, where can i invest my money safely, in response to inflation. Your interest payments are going to be considerably lower than what you would earn on a normal treasury of the same length. However, you’re accepting that lower rate because your principal will increase, or decrease, in value to match inflation as measured by the Consumer Price Index. If inflation suddenly spikes to 5%, anyone with TIPS is sitting pretty while people who bought bonds at a fixed 2% rate are basically losing 3% a year.

Like any other treasuries, you expose yourself to all sorts of additional risk if you have to sell them before they mature, so you should make sure you won’t need to access that money prior to maturity.

Bottom Line: TIPS offer lower yields, but the principle will increase or decrease in value based on the prevailing inflation rates while you hold the bond.

Best For: Money you know you won’t need prior to the maturity date of the bond; funds in excess of the $, insured by the FDIC; investors looking for treasuries but interested in removing inflation-based risk from their portfolio

Read: 13 Investing Rules You Should Break During the Pandemic

6. Municipal Bonds

Municipal bonds, which are issued by state and local governments, are a good option for slightly better returns with only where can i invest my money safely more risk. There’s almost no chance the U.S. government defaults, but there are definitely cases of major cities filing for bankruptcy and losing their bondholders a lot of money.

But most people are probably aware that a bankruptcy by a major city is pretty rare — though if you want to be extra safe you could steer clear of any cities or states with large, unfunded pension liabilities.

And because the federal government has a vested interest in keeping borrowing costs low for state and local governments, it has made interest earned on munis tax-exempt at the federal level. In some cases, munis are except from state and local taxes as well. So not only are they usually where can i invest my money safely safe, but they come with the added bonus of reducing your tax bill when compared with many other options.

Bottom Line: These debts issued by state and local governments are a little riskier than treasuries but come with the bonus of being untaxed at the federal level.

Best For: Taking on marginally more risk in pursuit of marginally better returns; investing while also keeping your tax bill as low as possible; investors looking for relatively safe bonds

7. Corporate Bonds

Like governments of various sizes, corporations will also issue debt by way of selling bonds. Like munis, this can mean you’re still in safe territory, but it’s also no sure bet. Plenty of corporations that are teetering on the edge of solvency will where can i invest my money safely high yields for the high risk — usually referred to as “junk bonds” — and those aren’t a great call if you’re looking for something really safe.

Although corporate bonds are inherently riskier than treasuries and often riskier than munis, if you’re sticking to major, blue-chip public companies and holding the bonds to maturity, they’re still in the realm of being very safe.

Fortunately, you’re not left to guess how financially sound a company is. Public companies regularly issue financial reports detailing assets, liabilities and income, so you can get a clear sense of where it stands.

And if you, like most people, don’t really know your way around a balance sheet or income statement, you can rely on rating agencies like Moody’s or S&P Global Ratings. In most cases, an AAA-rated bond represents minimal risks if you hold it to maturity.

Bottom Line: These debts issued by corporations are just a bit riskier than munis, but usually offer just a bit where can i invest my money safely interest income.

Best For: A measured increase in your portfolio’s risk to improve returns; investors looking to diversify their earnest money contract philippines holdings

8. S&P Index Fund/ETF

Stock markets can be incredibly volatile, and on any given day you might gain or lose a big chunk of your investment. And given that a GOBankingRates survey of non-investors found that the primary factor keeping more people from buying stocks is a lack of funds to commit, it’s hard for many families to put at risk money they only freed up for saving by making major sacrifices elsewhere.

Diversifying Your Portfolio

Using index funds or exchange-traded funds can build diversification into your portfolio, where can i invest my money safely. Any one company can befall a disaster, but if you own shares of a fund holding stock of different companies, you’re spreading that risk out by a lot. All the better if you’re getting shares in large, stable companies that are known as “blue-chip stocks” in investing parlance.

One company might sink due to a disaster, but a few hundred at the same time? It’s highly unlikely.

Owning Stocks for the Long Term

Another where can i invest my money safely is to defray much of the risk of stock investments is to own stocks for a very, very long time. While stock markets are incredibly chaotic over any one week, month or even year, they actually become remarkably predictable when you start to look at them in terms of decades.

Over its history, the S&P has returned roughly 10% a year. And although there have been years where stocks plunged 30% or even 40%, the markets have always rebounded over the following years.

Good To Know

If you had owned an S&P ETF during the financial crisis, your investment would have lost almost half its value in just a few months, but over the next eight years, your investment would have averaged 18% per year, where can i invest my money safely. So, if you’re treating stock investments as being illiquid and only investing money you can be confident you won’t need to tap into for a few years, you’ll have the flexibility to wait out a nasty downturn in the economy and recover.

Why Choose the S&P Index?

The S&P is one of the most popular options for index investments. The index includes almost all blue-chip stocks, and has that long history of returning roughly 10% a year — an incredible return for how little risk is involved over a long time frame, where can i invest my money safely. You might also consider the Russellwhich is made up of the 1, most valuable American companies — giving you double the diversification.

Bottom Line: Stocks are riskier than bonds, but by purchasing large funds that represent hundreds of stocks and holding them for very long time periods, you can mitigate much of that risk and enjoy strong returns compared with bonds.

Best For:Long-term investments you won’t be cashing in for years or even decades; younger investors with plenty of time to be patient with the fluctuating markets; investors investir 100 em bitcoin in growing their money at a faster rate than bonds and banking products can provide

Discover: The Most Fascinating Things You Never Knew You Could Invest In

9. Dividend Stocks

Dividend stocks present some especially strong options for a few reasons. A dividend is a regular cash payment issued to shareholders — really the most direct way a stock can direct business success back to its investors. It also, where can i invest my money safely, typically, means some important things for the risk profile of that stock.

Here are some factors to consider when assessing a stock’s risk:

1. That dividend is much more consistent and gets paid out whether the stock is up or down. Even if your stock is underperforming in terms of its share value, you’re still getting something back, making it easier to hold onto the stock and wait out a downswing.
2. The dividend acts as something of a bulwark against falling share prices. Dividends are set as a per-share payment, but investors typically focus on the “dividend yield,” which is the percentage of a company’s share price that will be returned as dividends in a given year. As stock prices fall, you’re paying less for that same dividend.
3. The higher that yield gets, the harder it’s going to be for bargain-hunting dividend investors to pass it up. That’s not going to mean much for a company that’s obviously headed for bankruptcy — a bad investment regardless of the dividend yield — but it will help prop up the share price for a company that’s just going through some tough times.

Companies can and will slash their dividends in times of extreme hardship. It’s rare, where can i invest my money safely, as it usually results in the stock plunging — consistency is what people like about dividends, so they tend to react very poorly when a dividend appears less secure — but dividend payments are less secure than the coupon payment on a bond, for example, which is fixed.

That said, if you shop around for companies that not only offer a strong yield where can i invest my money safely have a long track record of consistently increasing their dividend on a regular basis — sometimes referred to as “dividend aristocrats” — you can mitigate a lot of that risk.

Bottom Line: Owning stock in an individual company is much riskier than the other options, but dividend stocks will provide a steady return whether markets are up or down.

Best For: Long-term investments that still produce passive income; investors looking to invest in order to create a regular income stream; younger investors reinvesting dividends to maximize growth

How Safe Investments With High Returns Compare

The ideal portfolio is one with both minimal risk and maximum returns. There’s always some compromise necessary to find the right balance. Although the relative certainty provided by your savings account is great, the returns it will provide aren’t quite enough on their own to really build wealth.

Likewise, while the returns provided by an S&P fund are much better over the long run, it’s important to look at them in the context of the risk that you must accept — most notably, the risk of double-digit percentage losses over the short-term — that insured banking products just don’t have.

More From GOBankingRates

Daria Uhlig, Cynthia Measom and John Csiszar contributed to the reporting for this article.

Doubling your money is a badge of honor, often used as bragging rights at parties and around the Thanksgiving dinner table. Spurious promises to double one's money can also be made by overzealous advisors or worse, scamsters and fraudsters. Perhaps the urge to double one's money comes from deep in our investor psychology—the risk-taking part of us that loves the quick buck. When it comes to efforts to do so, however, two critical elements that are interrelated need to be considered: time and risk. This refers both to your (investing) time horizon and risk tolerance, as well as the attributes of the investment itself, such as the time it might take for the investment to double, which in turn is a function of the riskiness of the investment.

Time Horizon and Risk Tolerance

Your investing time horizon is an extremely important determinant of the amount of investment risk you can handle where can i invest my money safely is generally dependent on your ageand investment objectives. For example, a young professional likely has a long investment horizon, so they can take on a significant amount of risk because time is on their side when it comes to bouncing back from any losses, where can i invest my money safely. But what if they're saving to buy a house within the next year? In that case, their risk tolerance will be low because they cannot afford to lose much capital in the event of a sudden market correction, which would jeopardize their primary investment objective of buying a house.

Likewise, conventional investing strategy suggests that people in or near retirement should have their funds deployed where can i invest my money safely "safe" investments like bonds and bank deposits, but in an era of extremely low interest rates, that strategy carries its own risk, mainly of the loss of purchasing power through inflation. In addition, a retired individual in their 60s with a decent pension and no mortgage or other liabilities where can i invest my money safely probably have a reasonable amount of risk tolerance.

Let's now turn to the "time and risk" attributes of an investment itself. An investment that has the potential where can i invest my money safely double your money in a year or two is undoubtedly more exciting than one that may do so in 20 years. The issue here is that an exciting, high-growth investment will almost certainly be far more volatile than a staid, where can i invest my money safely, "Steady Eddy" type of investment. Gta v mit bunker geld verdienen higher the volatility of an investment, where can i invest my money safely, the riskier it is. This increased volatility or risk is the price an investor pays for the allure of higher returns.

How long does it take to double one's money?

Making money from home blog Rule of 72 is a well-known shortcut for calculating how long it will take for an investment to double if its growth compounds annually. Just divide 72 by your expected annual rate of return. The result is the number of years it will take to double your money.

When dealing with low rates of return, the Rule of 72 provides a fairly accurate estimate of doubling time. However, that estimate gets less precise at very high return rates, as can be seen in the chart below, which compares the estimates for "time to double" (in years) generated by the Rule of 72 and the actual number of years it would take for an investment to double in value.

Five Ways to Double Your Money

Doubling your money is actually a realistic goal that most investors can strive toward and is not as daunting a prospect as it may seem initially for a new investor. There are a few caveats, where can i invest my money safely

• Be very honest with yourself where can i invest my money safely your investment advisor, if you have one) about your risk tolerance; finding out you don't have the stomach for where can i invest my money safely when the market plunges 20% is the worst possible time to make this discovery and may where can i invest my money safely very detrimental to your financial well-being.
• Don't let the two emotions that drive most investors—greed and fear—have an adverse impact on your investment decisions.
• Be extremely wary about get-rich-quick schemes that promise you "guaranteed" sky-high results with minimal risk, because there's no such thing. Because there are probably many more investment scams out there than there are sure bets, be suspicious whenever you're promised results that appear too good to be true. Whether it's your broker, your brother-in-law, or a late-night infomercial, take the time to make sure that someone is not using you to double their money.

Broadly speaking, there are five ways to double your money. The method you choose depends largely on your appetite for risk and your timeline for investing. You may also consider adopting a mix of these strategies to achieve your goal of doubling your money.

1. The Classic Way—Earning It Slowly

Investors who have been around for a while will remember the classic Smith Barney commercial from the s in which British actor John Houseman informs viewers in his unmistakable accent that "they make money the old-fashioned way—they earn it."

When it comes to the most traditional way of doubling your money, that commercial is not too where can i invest my money safely from the truth. The time-tested way to double your money over a reasonable amount of time is to invest in a solid, balanced portfolio that's diversified between blue-chip stocks and investment-grade bonds.

The S&P Index—the most widely followed index of blue-chip stocks—has returned about % annually (including dividends) from towhile investment-grade corporate bonds have returned % annually over this year period. Thus, a classic 60/40 portfolio (60% equities, 40% bonds) would have returned about % annually during this time. Based on the Rule of 72, such a portfolio should double in about years, and quadruple in approximately years.

Note, however, that a significant amount of volatility generally accompanies such sterling results. Investors should brace themselves for occasional sharp drawdowns, such as the 35% plunge in the S&P within a six-week period in the first quarter of as the coronavirus pandemic erupted worldwide.

In addition, very high returns compared to the historical norm may reduce the potential for future returns. For example, the S&P recovered from its plunge in record time and powered its way to new record highs by year-end Although it returned a jaw-dropping total return of % from tosuch stellar returns may mean that future returns from the S&P may be significantly lower.

What about real estate?

Real estate is another traditional way to build wealth, although it is a far less attractive proposition at times like the present when housing prices in North America have surged to record levels in many regions. The prospect of rising interest rates also reduces the appeal of real estate investment.

That said, during a real estate boom, the prospect of doubling one's money proves irresistible to many investors because the huge amount of leverage provided from mortgage financing can really juice up returns. For example, a 20% down payment on an investment property worth $, would require an investor to plunk down $, where can i invest my money safely, and get a mortgage for the balance of $, If the property appreciates 20% to $, in the next few years, the investor now has equity worth $, in it, which represents a doubling of the original $, investment.

2. The Contrarian Way—Blood in the Streets

Even the most unadventurous investor knows that there comes a time when you must buy, not because everyone is getting in on a good thing but because everyone is where can i invest my money safely out.

Just as great athletes go through slumps when many fans turn their backs, the stock prices of otherwise great companies occasionally go through slumps, which accelerate as fickle investors bail out. As Baron Rothschild supposedly once said, smart investors "buy when there is blood in the streets, even if the blood is their own."

Nobody is arguing that you should buy garbage stocks. The point is that there are times when good investments become oversold, which presents a buying opportunity for investors where can i invest my money safely have done their homework.

Valuation metrics used to gauge whether a stock may be oversold include a company's price-to-earnings ratio and book value, where can i invest my money safely. Both measures have well-established historical norms for both the broad markets and for specific industries. When companies slip well below these historical averages for superficial or systemic reasons, smart investors smell an opportunity to double their money.

Being contrarian means that one is going against the prevailing trend. It therefore requires a greater degree of risk tolerance and a substantial amount of due diligence and research. As such, a contrarian strategy is best left to very experienced investors and is not recommended for a conservative or inexperienced investor.

3. The Safe Way

Just as the fast lane and the slow lane on the highway will eventually get you to the same place, there are quick and slow ways to double your money. If you prefer to play it safe, bonds can be a less hair-raising journey to the same destination.

Consider zero-coupon bonds, for example, where can i invest my money safely. For the uninitiated, zero-coupon bonds may sound intimidating. In reality, they're simple to understand. Instead of purchasing a bond that rewards you with a regular interest payment, you buy a bond at a discount to its eventual value at maturity.

One hidden benefit is the absence of reinvestment risk. With standard coupon bonds, there are the challenges and risks of reinvesting the interest payments as they're received. With zero-coupon bonds, there's only one payoff, and it comes when the bond matures. On the flip side, zero-coupon bonds are very sensitive to changes in interest rates and can lose value as interest rates rise; this is a risk factor to be considered by an investor who does not intend to hold a zero-coupon bond to maturity.

Series EE Savings Bonds issued by the U.S. Treasury are another attractive option for conservative investors who do not mind waiting a couple of decades for the investment to double. Series EE Savings Bonds are low-risk savings products that are only available in electronic form on the TreasuryDirect platform. They pay interest until they reach 30 years or the investor cashes them in, whichever comes first. Although the current rate of interest is a paltry % for bonds issued between November and Aprilthey come with a guarantee that bonds sold now will double in value if held for 20 years. The minimum purchase amount is $25, while the maximum purchase per calendar year is $10, Savings bonds are exempt from state or local taxes, but interest earnings are subject to federal income tax.

4. The Speculative Way

Though slow and steady might work for some investors, others find themselves falling asleep at the wheel. For folks with a high degree of risk tolerance and some investment capital that they can afford take surveys make money lose, the fastest way to super-size the nest egg may be the use of aggressive strategies such as options, margin trading, penny stocks, and in recent years, cryptocurrencies. All can super-shrink a nest egg just as quickly.

Stock options, where can i invest my money safely, such as simple puts and calls, can be used to speculate on any company's stock. For many investors, especially those who have their fingers on the pulse of a specific industry, options can turbocharge a portfolio's performance.

Each stock option potentially represents shares of stock. That means a company's price might need to increase only a small percentage for an investor to hit one out of the park. Just be careful and be sure to do your homework before trying it.

For those who don't want to learn the ins and outs of options but do want to leverage their faith or doubts about a particular stock, there's the option of buying on margin or selling a stock short. Both these methods allow investors to essentially borrow money from a brokerage house to buy or sell more shares than they actually where can i invest my money safely, which in turn raises how to buy libra cryptocurrency price potential profits substantially. This method is not for the faint of heart. A margin call can back you into a corner, and short-selling can generate infinite losses.

Lastly, extreme bargain hunting can turn pennies into dollars. You easy way to earn money online roll the dice on one of the numerous former blue-chip companies that have sunk to less than a dollar. Or, you can sink some money into a company that looks like the next big thing. Penny stocks can double your money in a single trading day. Just keep in mind that the low prices of these stocks reflect the sentiment of most investors.

As Bitcoin has grown in popularity and become more mainstream, other cryptocurrencies have also where can i invest my money safely in recent years as one of the favored ways for speculators to make a quick buck. Though Bitcoin surged 60% inwhere can i invest my money safely, its performance pales in comparison to that of as many as 10 other cryptocurrencies (with a market cap of at least $10 billion) that soared % or more insuch as Ethereum, Cardano, Shiba Inu, Dogecoin, Solana, and Terra (Solana and Terra gained more than 9,% in ). Unfortunately, the cryptocurrency arena is a fertile hunting ground for scamsters, and there are numerous instances of crypto investors losing a great deal of money through fraud. Would-be cryptocurrency investors should therefore take the utmost care when putting their hard-earned money into any cryptocurrency.

5. The Best Way

Though it's not nearly as fun as watching your favorite stock on the evening news, the undisputed heavyweight champ is an employer's matching contribution in a (k) or another employer-sponsored retirement plan. It's not sexy and it won't wow the neighbors, but getting an automatic 50 cents for every dollar you save is tough to beat.

Even better is the fact that the money going into your plan comes right off the top of what your employer reports to the IRS. For most Americans, that means that each dollar invested costs them only 65 to 75 cents.

If you don't have access to a (k) plan, you still can invest in a traditional IRA or a Roth IRA. You won't get a company match, but the tax benefit alone is substantial. A traditional IRA has the same immediate tax benefit as a (k). A Roth IRA is taxed in the year the money is invested, but when it's withdrawn at retirement, no taxes are due on the principal or the profits.

Either is a good deal for the taxpayer. But if you're young, think about that Roth IRA. Zero taxes on your capital gains? That's an easy way to get a higher where can i invest my money safely return, where can i invest my money safely. If your current income is low, the government will even effectively match some portion of your retirement savings. The Retirement Savings Contributions Credit reduces your tax bill by 10% to 50% of your contribution.