3 Best Places To Save Your Extra Money

If you have some extra money, you may feel very good about yourself. Instead of deciding what to refinance or consolidate, you get extra cash to use for a variety of purposes, including saving it for a rainy day.

It's probably not a good idea to keep the money under your mattress or under the tool shed. We have some great ideas on where you can keep it as long as you need it.

1. Certificate Of Deposit

You may have heard of the term term certificate of deposit before, commonly called CD. CD is a financial tool offered by banks. With a CD, you lock a certain amount of money for a certain period of time.

The appeal with CDs is that you usually get a better interest rate, or get your money back compared to what you get from a savings account. Also, there is no risk. You have no chance of losing money, which could happen if you put it in the stock market or anywhere else.

If you put your money in a CD, however, understand that you don't have to touch it before the maturity date. This could be in six months, a year, two years, or any other time.

If you remove this amount from the CD, you will have to pay a penalty for doing so. So if you put money into a CD, try to make sure you don't need that amount until the maturity date.

2. High Yield Savings Accounts

Putting your extra money into a high yielding savings account will ensure that your money is 100% safe. You get zero fluctuations, and you also have liquidity. You're earning a better interest rate than a standard savings account, and you can withdraw some of that money whenever you need it.

If you want to put some money into a high yield savings account, shop for the best rates. You can always go with a local bank or a larger, national bank. You might also want to consider an online bank like Eli. They have no place for bricks and mortar, but they compensate by offering some of the best interest rates on high yielding savings accounts.

3. Stock

CDs and high yielding savings accounts come without any risk, but if you put it in more risky investment vehicles your money will not make that profit. If you don't mind gambling with your extra cash, you can put it on the stock market.

If you do not want to buy individual stocks, you can invest in S&P 500. This is an index of 500 of the most prominent companies trading on the New York Stock Exchange.

Basically, if you invest in the S&P 500, you are betting that the stock market, as a whole, will perform well. Historically, betting on the stock market has been rewarding for flourishing. However, there may come a time when you need to withdraw that money, and there may come a time when the market is down.

If this happens, you will either need to withdraw your money at a loss, or you will have to wait for the market to rise so that you too can break even or make a profit.

You Have Many Options.

You have many options to save your extra money. If you avoid risk, you can put some money in the CD. You will receive a guaranteed rate of return, as long as you leave the money there for a fixed period.

You can also put the money into a high yielding savings account. You will earn more interest than a traditional savings account, and your cash is liquid, so you can withdraw it whenever you want.

If you don't mind taking risks, you can invest in S&P 500. If the stock market performs well, your money will increase. However, if you try to get to a lower point, you will lose some of your investment.