Best Cash Investments To Make Right Now

With the Federal Reserve raising interest rates to combat inflation, economic turmoil in Europe, and political tensions with China, the global economy is in a state of flux. As a result, many investors are unsure about where to allocate their money. Here are some options for what to invest in right now:

- High-yield savings accounts, CDs, and bonds: With interest rates at their highest level in decades, investors can take advantage of high-yield savings accounts, certificates of deposit (CDs), and bonds. While cash investments may not seem appealing due to their low returns, they can be a good option for those seeking low-risk investments.

- Dollar-cost averaging (DCA): This strategy involves allocating a fixed amount of money regularly into a diverse basket of stocks, ETFs, REITs, and/or index funds. It helps to reduce the impact of market volatility and is recommended by investment experts like Warren Buffet.

- Real estate: Despite rising interest rates, real estate remains a popular investment choice, especially in growing metros like Dallas, Austin, and Miami. It has been a dependable way to build wealth over time and can provide passive income through rentals.

- Stock market: Stocks have been one of the best wealth generators over the long term, with annual returns of about 10%. However, they can be volatile and intimidating for some investors.

- Precious metals: With high inflation, investing in gold or other precious metals can be an attractive option. However, gold has failed to hold its value over the past decade, and other investments may be more suitable for long-term wealth generation.

- Cryptocurrency: Crypto is a trendy and volatile investment option that appeals to investors with a high-risk tolerance. While it can lead to high rewards, it is important to remember that it is an unproven and speculative asset.

High-yield savings accounts

Pibank Savings

Pibank offers a high-yield savings account with a competitive interest rate of 5.50% APY. It has a $0 minimum opening deposit and no monthly service fees. However, there are some downsides to this account. Pibank Savings doesn't support payments through Bill Pay or Zelle, and you may be charged fees by your external financial institution for incoming and outgoing wire transfers.

Newtek Bank Personal High Yield Savings Account

The Newtek Bank Personal High Yield Savings Account is one of the highest-interest savings accounts available, offering a $0 minimum opening deposit. Newtek Bank also offers one of the best 6-month CD rates. The account does not come with a debit or ATM card, so you will need to transfer your money to an external bank account if you need to withdraw cash.

Openbank High Yield Savings

The Openbank High Yield Savings Account offers a high savings account interest rate of 5.00% APY and does not charge any monthly service fees. However, there are some downsides to this account. You will need a phone with fingerprint or face recognition technology to access your account, and you won't have access to ATMs or mobile check deposit. Additionally, Openbank does not offer a checking account, so transferring money may be more difficult.

LendingClub LevelUp Savings Account

The LendingClub LevelUp Savings Account is a good option for those looking for a free savings account, as it has a $0 minimum opening deposit and no monthly service fee. It also comes with a free ATM card, making it convenient for those who want to withdraw cash. To get the full 5.00% APY, you will need to deposit at least $250 each month; otherwise, you will earn 4.00% APY.

Ivy Bank High-Yield Savings Account

The Ivy Bank High-Yield Savings Account is a good choice for those with at least $2,500 to open an account and maintain an account balance between $2,500 and $1 million to earn the highest APY. For account balances under $2,500, you will earn 0.05% APY. Ivy Bank is an online-only division of Cambridge Savings Bank and is available to anyone in the United States except for California residents.

Synchrony Bank High Yield Savings

The Synchrony Bank High Yield Savings Account stands out for its convenient withdrawal options. You can access your money by ATM via an optional ATM card, wire transfer (up to three free per statement cycle), or through an electronic transfer to or from accounts at other banks. This account has no monthly fees or minimum deposits, and Synchrony Bank refunds ATM fees in the US up to $5 per statement cycle.

Long-term certificates of deposit

When considering long-term CDs, it's important to keep in mind that they usually have a term of three months to five years. During this time, your money is locked in, and you can't make additional contributions. Longer-term CDs often have higher rates than shorter-term ones, but it's essential to compare the rates offered by different financial institutions.

One advantage of long-term CDs is that they provide a safe and secure investment option. They are federally insured, so your money is protected. Additionally, CDs don't usually come with monthly fees, which makes them an attractive choice.

When choosing a long-term CD, consider the CD term, type, rate, and deposit amount. The CD term refers to the length of time your money will be locked in, and it's important to select a term that aligns with your financial goals. The CD type includes options like no-penalty CDs, which allow for early withdrawals, and bump-up CDs, which offer a rate increase during the term. The CD rate is the interest you'll earn, so look for competitive rates offered by banks and credit unions. Finally, the CD deposit is the amount you put into the CD, and it's generally recommended to deposit more than the minimum requirement to maximize your returns.

Long-term CDs are an excellent option if you want guaranteed returns with minimal risk. They provide a safe place for your savings, especially if you're planning for future purchases or investments. By comparing CD terms, rates, and financial institutions, you can make an informed decision that aligns with your financial goals.

Long-term corporate bond funds

Some of the best long-term corporate bond funds include the SPDR Portfolio Long Term Corp Bd ETF, iShares 10+ Year Invmt Grd Corp Bd ETF, and Vanguard Long-Term Corporate Bd ETF. These funds aim to track the performance of corporate bond indices and provide investment results corresponding to the price and yield performance of these indices.

When considering investing in long-term corporate bond funds, it is essential to assess your financial goals, timeline, and risk appetite. While these funds offer the potential for high current income and attractive total returns, they also involve certain risks. Changes in economic conditions or other factors may adversely affect a bond issuer's ability to make principal and interest payments. Therefore, investors should carefully consider their risk tolerance and consult with financial professionals before making investment decisions.

Additionally, it is worth noting that the Federal Reserve has started cutting interest rates, which has led to a mixed performance in the bond market. While long-term bond yields have risen, there has been a decline in yields on shorter-term securities. As such, investors should monitor the changing interest rate environment and its potential impact on their investment strategies.

Dividend stock funds

A dividend is a distribution of a company's earnings to eligible shareholders. Dividend payments and amounts are determined by the company's board of directors. Many companies do not pay dividends and instead retain their earnings to be invested back into the company. Dividend-paying companies tend to be larger, established companies with predictable profits. Companies in the healthcare and pharmaceuticals sectors, as well as those structured as master limited partnerships (MLPs) and real estate investment trusts (REITs), are required to make specified distributions to their shareholders.

Value stock funds

Morningstar Recommendations:

• American Funds American Mutual (AMRMX)
• Diamond Hill Large Cap (DHLYX)
• Dodge & Cox Stock (DODGX)
• Harbor Mid Cap Value (HAMVX)
• John Hancock Disciplined Value Mid Cap (JVMIX)
• JPMorgan Equity Income (OIEJX)
• LSV Small Cap Value (LSVQX)
• MFS Mid Cap Value (MCVRX)
• Schwab US Dividend Equity ETF (SCHD)
• Vanguard High Dividend Yield Index/ETF (VHYAX, VYM)
• Vanguard Mid-Cap Value Index/ETF (VMVAX, VOE)
• Vanguard Russell 1000 Value Index (VRVIX)
• Vanguard S&P Mid-Cap 400 Value Index (VMFVX)
• Vanguard S&P Small-Cap 600 Value Index (VSMVX)
• Vanguard Small-Cap Value Index/ETF (VSIAX, VBR)
• Vanguard Value Index/ETF (VVIAX, VTV)
• Victory Sycamore Established Value (VEVRX)
• Victory Sycamore Small Company (VSORX)

Forbes Recommendations:

• SPDR Portfolio S&P 500 Value ETF (SPYV)
• Fidelity Value Factor ETF (FVAL)
• Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF)
• Vanguard International High Dividend Yield ETF (VYMI)
• Invesco S&P MidCap Value with Momentum ETF (XMVM)
• Vanguard Mid-Cap Value ETF (VOE)
• Vanguard Small-Cap Value ETF (VBR)

Frequently asked questions