Finding The Safest Investments For Your Money In 2010
With the current economic problems and the volatility in the stock market, people want to find out how to get the best interest rates. They are nervous about investing and want to be sure their money is absolutely safe. Often people will choose a lower rate of return now just to ensure that their investment is secure. So what options are available if you have some money to invest and want to earn more interest than checking and savings accounts are paying?
Bank CD’s are guaranteed by FDIC insurance which is really the US government and that is about the safest you can get right now. If the FDIC insurance fails, that will mean the end of the US government and everything will be in total chaos so you have to trust it is safe. Unfortunately, certificate of deposits are paying only about 1%, which is a historically low rate of return.
Strangely enough, the best CD rate is not always the one with the longest term. Sometimes when you go into a bank looking for the highest rates, you will notice that the 30-year CD or 15 year CD actually has a lower rate than something for less years. Also, because of a special promotion, you may be able to get the best rate with one of the shorter terms CD’s.
These low rates really hurts all the people that need interest income to help them get by which are often retired people and seniors. It may be advisable for young people to invest in stocks and other vehicles that have some risk and can give a better rate of return but not older people. This is because young people have a long time horizon and can withstand market fluctuations but older people need to have their money available at all times.
For safety, other good alternatives are Treasury bills, or just holding on to your cash. In reality, you are providing the U.S. government with a free loan, and the rate of return is lower than that of a CD. . Holding on to cash means that your nest egg will not keep up with inflation, and the value of your money will decrease. The majority of individuals are experiencing financial difficulties during this time of economic turmoil.
