Invest Now: Where To Put Your Money

There are many options for what you should be investing in right now, depending on your risk tolerance, the amount of money you have to invest, and your time horizon.

If you have a low risk tolerance, you may want to consider investing in high-yield savings accounts, certificates of deposit (CDs), or bonds. These options are considered safer but typically have lower returns.

If you have a higher risk tolerance and are comfortable with market volatility, investing in stocks, exchange-traded funds (ETFs), mutual funds, or growth stocks may be more suitable. These options offer higher potential returns but come with greater risk.

Additionally, consider factors such as your financial situation, investment goals, and the amount of time you can dedicate to researching and selecting individual stocks or funds. Diversification is also important to reduce risk and enhance long-term returns.

Remember, investing involves risk, and past performance does not guarantee future results. It's always recommended to consult with a qualified financial advisor before making any investment decisions.

High-yield savings accounts

• DCU Primary Savings Account: Offers 6% APY on balances up to $1,000. No monthly service fees. Membership eligibility requirements apply.
• My Banking Direct High-Yield Savings Account: Offers 5.55% APY on balances of $1 or more. No monthly service fees. $500 minimum opening deposit.
• EagleBank High-Yield Savings Account: Offers 5.38% APY on balances up to $500,000. No account activity or maintenance fees. $1,000 minimum opening deposit.
• Western Alliance Bank High-Yield Savings Premier Account: Offers 5.36% APY on the entire account balance. No account activity or maintenance fees. $500 minimum opening deposit.
• BrioDirect High-Yield Savings Account: Offers 5.30% APY. No monthly maintenance fees. $5,000 minimum opening deposit.
• Forbright Growth Savings: Offers 5.30% APY. No minimum opening deposit or monthly service fee. Environmentally friendly bank.
• Ivy Bank High-Yield Savings Account: Offers 5.30% APY on balances between $2,500 and $1 million. $2,500 minimum opening deposit.
• TAB Bank High-Yield Savings Account: Offers a high interest rate and no monthly maintenance fee. $0 minimum opening deposit.
• NexBank High Yield Savings Account: Top high-yield savings account on Raisin, a digital platform that allows you to find and manage multiple savings accounts and CDs.
• BMO Alto Online Savings Account: Offers a competitive rate of 5.10% APY. $0 minimum opening deposit. No mobile banking app.
• Betterment Cash Reserve Account: Offers a promotional APY boost of 5.50% for new customers for the first three months, then 5.00% thereafter. $0 minimum opening deposit.
• Synchrony High-Yield Savings Account: Offers 4.75% APY. No minimum opening deposit or monthly fees. Comes with an ATM card.

Long-term certificates of deposit

When it comes to long-term CDs, you have a few options to choose from. Here are some of the best long-term CDs currently available:

• First National Bank of America: Offers competitive rates on CD terms ranging from 24 to 84 months. Their 60-month CD pays 4.50% APY, which is one of the highest rates available.
• PenFed Credit Union: Offers a rare 84-month certificate with a competitive rate of 3.00% APY. They also have nine other term options and easy-to-meet membership requirements.
• Discover® Certificates of Deposit: Their 10-year CD pays 3.75% APY, which is hard to find for this term length. They also offer a total of 12 term options and have no fees for opening or maintaining your CD account.
• Quontic Bank: Offers a three-year CD with a competitive rate of 4.40% APY. They have five CD terms to choose from, a low minimum deposit requirement, and a user-friendly mobile app.
• Marcus by Goldman Sachs: Provides a variety of CD terms, including a two-year CD with a high yield of 4.40% APY. They also allow for the penalty-free withdrawal of interest earned on your CD each month.
• Bread Savings: Offers a one-year CD with the highest rate available (5.25% APY). They also allow for deposits of up to $1 million per account and $10 million per customer.

When choosing a long-term CD, it's important to consider the APY, minimum deposit requirements, compounding schedule, early withdrawal penalties, and the term length. It's also a good idea to shop around and compare options at different banks and credit unions to find the best rates and terms for your needs.

Dividend stock funds

• Cash flow: Dividend funds provide a stable and consistent source of income by distributing dividends from a range of stable, profitable companies across different industries.
• Yield: Dividend funds often generate higher dividend yields than broad-market indexes, making them attractive to income-oriented investors.
• Resilience: According to analysts, dividend funds tend to perform better than other equity funds during market downturns.

When choosing a dividend fund, it is essential to assess your investment goals, risk tolerance, and financial situation. Additionally, consider the following characteristics:

• Diversification: Dividend funds should hold a diverse range of stocks, ideally at least 100, with no more than one-third of their assets in the top 10 holdings.
• Turnover: Look for funds with reasonable turnover rates, preferably around 40% or less, to avoid excessive trading costs.
• Fees: Choose funds with low fees, as these directly impact the fund's yield and total return.

Value stock funds

• Vanguard Value Index Fund Admiral Shares (VVIAX): This fund is considered a core holding and employs a long-term buy-and-hold approach, investing in stocks that make up the CRSP US Large-Cap Value Index. It has returned 10.48% over the last 10 years and 7.06% over the last five years.
• Vanguard Selected Value Fund (VASVX): This actively managed fund targets undervalued companies in the mid-cap range, making it an ideal satellite holding for a portfolio. It has returned an average of 8.79% over the last 10 years and 3.37% over the last five years.
• Vanguard Small-Cap Value Index Fund Admiral Shares (VSIAX): This fund captures the small-cap range of stocks, offering even greater upside potential. It has returned 9.46% over the last 10 years and 4.42% over the last five years.
• Fidelity® New Millennium Fund®: This fund seeks capital appreciation and normally invests in common stocks.
• Vanguard Equity Income Fund: This fund seeks to provide an above-average level of current income and reasonable long-term capital appreciation.
• Hamlin High Dividend Equity Fund: This fund seeks high current income and long-term capital appreciation and will normally invest at least 80% of its net assets in common stocks.
• Columbia Dividend Income Fund: This fund seeks total return, consisting of current income and capital appreciation, and invests at least 80% of its net assets in dividend-paying stocks.
• Vanguard Windsor™ II Fund: This fund seeks to provide long-term capital appreciation and income and invests mainly in large- and mid-capitalization companies.
• ClearBridge Large Cap Value Fund: This fund seeks long-term capital growth as its primary investment objective and current income as a secondary objective.
• BNY Mellon Dynamic Value Fund: This fund seeks capital appreciation and normally invests at least 80% of its net assets in equity securities.

Robo-advisor portfolio

Robo-advisors use computer algorithms to build and manage an investment portfolio for you, based on your goals and your tolerance for risk. They automate investment management and, since portfolio management is handled by software rather than a human financial advisor, robo-advisors charge lower fees, which can translate to higher long-term returns for investors.

• Betterment: Betterment is one of the pioneers of the robo-advisor approach to investing. It offers a powerful combination of goal-based tools, affordable management fees and no account minimum. It has a wide range of investments, including socially responsible and crypto portfolios, and offers paid access to financial advisors and excellent tax strategy.
• Wealthfront: Wealthfront is the best overall robo-advisor due to its vast customization options, fee-free stock investing, low-interest rate borrowing, dynamic tax-loss harvesting, and other key features. It has a low required minimum investment of $500, plus customizable automated portfolios, individual stock investing, high-yield cash, superb digital financial planning, automated tax-loss harvesting, and lending capabilities.
• SoFi Automated Investing: SoFi Automated Investing is a great choice if you’re primarily focused on limiting fees while still enjoying a basic robo-advisor service. There’s no annual advisory fee, and your portfolio is stocked with ETFs that generally charge low expense ratios. You get access to real-life professionals and only need $1 to get started.
• Vanguard Digital Advisor: If you’re just starting out in your career or you’re looking for a simple tool without too many bells and whistles, Vanguard Digital Advisor is a good option. It offers basic services, such as retirement savings and automatic rebalancing, for a low annual net advisory fee of no more than 0.20% of your managed account balance. That’s better than what you’ll find from most robo-advisors. Your portfolio will be made up of low-cost Vanguard funds that track broad indexes and mirror your risk tolerance.
• Vanguard Personal Advisor Services: If you need a robo-advisor to manage a relatively sizable chunk of cash and want access to human financial advisors, Vanguard Personal Advisor Services is a good option. This platform’s minimum balance threshold of $50,000 is half the amount required for Empower or Betterment Premium, yet it charges lower fees—0.30% versus 0.89% and 0.40%, respectively. You’ll have access to real-life Vanguard professionals, many of whom are certified financial planners, and all of whom are fiduciaries.

Frequently asked questions