3 Affordable Investment Options to Save Money

So, I would like to invest as much money as possible. He has one problem. It turns out, the free market isn’t all that free. Many investment types charge management fees and/or minimum investment amounts. Mutual funds charge both. Many CDs and bonds require the investor to deposit more than his $500.

Fees put pressure on profits. This is even more true if you only have a small amount of savings to invest. Similarly, minimum amounts prevent investors from participating in profitable money-making opportunities. This includes the stock market, which has returned an average of 6.5% since 1928 (after accounting for inflation).

In fact, many of these fees are avoidable. With a little effort, you can earn less than $50. Here are three affordable investment options to help you save money.

1. Ore-unit shares (stocks and ETFs)

Stocks are amazing. I own dozens of them. However, there are some products with surprisingly high prices. As of this writing, Costco’s price per share is $723.26. It’s a great company, but not everyone can or wants to bet that much money on a single company.

Either way, you want to avoid picking stocks based on price tags that don’t tell you much about the health of the company. A well-diversified portfolio typically has your savings spread out roughly evenly across dozens of investments.

One solution is fractional shares. Some fractional stock brokers let you acquire stock in big companies like Costco and Apple for as little as $1. Investing in an ETF automatically further diversifies your investment.

2. Low-cost robo-advisors

Not all investors have time to research the stock market. Enter advisor. Wealth advisors and robo advisors choose your investments. However, they typically charge a fee to cover the cost of market research and portfolio management.

Of the two, robo-advisors have lower fees. A typical robo-advisor fee is between 0.2% and 0.5% of the assets held, charged annually. Human managers charge about twice that.

With low-cost robo-advisors, the cost is even lower. SoFi offers a robo-advisor service with no management fees. Other investment costs are low. This is a good and affordable option for people who want to avoid paying large fees on a small investment.

3. No minimum number of CDs

Relatively speaking, bond investments are safe. Bonds and certificates of deposit (CDs) fall into this category. You pay fixed, predictable interest, and your interest rate is stable. Currently, CDs are trending because interest rates are generally higher and banks are looking for returns of 5% or more per year.

Additionally, CDs allow you to lock in your fees for the duration of your CD contract. Even if the Federal Reserve lowers interest rates (as is expected this year), fixed interest rates will remain high.

One drawback is that fixed income investments typically require a minimum deposit. You often need to invest $500 or more to open a CD at the best rate.

However, there are also CDs with no minimum deposit amount. Some of the best CD rates allow you to invest as little as $1. It’s an affordable way to earn more from the money you save. CDs are worth considering because they often offer better rates than savings accounts.

Which is the best investment option?

Fractional shares are ideal for high-risk, high-return investors. Although you may lose money on your investments, your returns may exceed deposits in high-yield savings accounts, money market funds, or CDs.

Low-cost robo-advisors allow investors to approach you without any hassle. You don’t have to spend a lot of effort choosing stocks. Your advisor will do it for you. Opening a CD with no minimums is a relatively safe way to increase your savings. The problem is that you have to leave your funds sitting there for anywhere from 6 months to 5 years, depending on the time period you choose. Otherwise, you will have to pay a CD early withdrawal fee.

Take advantage of your savings with these low-cost options for just $50. If nothing looks appealing, consider leaving your savings in a high-yield account to earn interest on your deposits. This is one of the safest ways to make money on your savings.

These savings accounts are FDIC insured and can earn 11 times more than banks

Many people miss out on guaranteed returns because their money sits in large bank savings accounts that earn little interest. We chose best online savings account You can earn 11 times the national average savings account interest rate. click here We reveal the best-in-class accounts that made it to our final list of 2024’s Best Savings Accounts.