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Best way to invest $2,000. Joanna Boland, Chris Garza. Four Investment Options.
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Best way to invest $2,000 Joanna Boland, Chris Garza
Four Investment Options 1. Savings Account- A bank account that is used to store money in for long periods of time. The money is insured and cannot be touched by the bank. Your money grows because of the interest rate that banks apply to the money in the account, but withdrawing money is frowned on. Banks may charge you for withdrawing money; some might not even let you withdraw. 2. Certificate of Deposit- A banking account that is similar to a savings account except you have to keep your money in the account for specific account of time (e.g. 5 years, 10 years, etc.) with certain interest rates for the years you chose to leave your money in the account. Longer periods of time you chose to put your money in the account usually mean higher interest rates. You cannot touch the money in this account whatsoever. 3. Market Money Account- A savings account that has a higher rate of interest depending on how much money you initially put into the account. The higher the start value, the bigger your interest rate. 4. Individual Retirement Account- A savings account specifically used for retirement. Similar to a saving account except the money is considered income and is taxed when you start withdrawing it. There are different types of IRAs that fit different situations for different people for example there are small business IRAs with certain benefits and restrictions for people with small businesses.
Pros & Cons Savings Account- The savings account is a great option if you continue to add money into the account, but there is a small interest rate, so your money won't grow as fast as other options Certificate of Deposit- The great thing about this account is that you have a interest rate and can make a lot of money, but you CANNOT take the money out of the bank for any reason whatsoever. Money Market Account- This account is really only beneficial if you are putting in a large sum of money from the get go because you'll have a large interest rate Individual Retirement Account- This account is great because there are many different types of IRAs and you can usually find an account with a great interest rate, but you shouldn't withdraw from the account because the money is taxed. All of the accounts are beneficial if you only do not withdraw any of the money.
Savings Account San Antonio Federal Credit Union is the best option for the Savings Account because you earn the most money.
Certificate of Deposit The best option for the Certificate of Deposit is the San Antonio Federal Credit Union
Money Market Account San Antonio Federal Credit Union is the best option for the Money Market Account.
Individual Retirement Account The best option for the Individual Retirement Account is the BBVA.
How long will it take your investments to double? For the banking accounts we recommend the time it takes for each of your accounts to double is as follows: Savings Account: 277 years and 99 days Certificate of Deposit: 21 years and 34 days Money Market Account: 173 years and 104 days Individual Retirement Account: 8 years and 241 days
$10,000 In a savings account without interest if you put in $300 a month with an initial deposit of $2,000 it would take 2 years and 81 days for you to reach $10,000 in the account But with interest for each of the different accounts it would take Bank of America close to 1 year and 148 days or 17 months Thus you earn the same amount of money in about 6 months shorter time
Best Advice We advise you either use the Certificate of Deposit from the San Antonio Federal Credit Union or the Individual Retirement Account from BBVA