I’m 32 and have about $10,000 saved for a house. I plan to buy in a few years and might use a VA loan, so this isn’t necessarily for a down payment.
I’m thinking about putting this money into a brokerage account and investing in something like SPY or QQQ. I’d like to get more growth than what a savings account offers, but I’m not sure if this is a good idea.
Any advice? Should I stick with savings, or are there better options?
Keep it in a high-yield savings account (HYSA). You’ll earn some interest with little to no risk.
Gentry said:
Keep it in a high-yield savings account (HYSA). You’ll earn some interest with little to no risk.
I checked online and saw HYSA rates are around 3-5% APY. Is there anything I should watch out for?
@Rex
You’ll sacrifice higher returns for safety. Interest rates might go up or down, but your balance will grow. Just check for fees—most don’t have any.
Gentry said:
@Rex
You’ll sacrifice higher returns for safety. Interest rates might go up or down, but your balance will grow. Just check for fees—most don’t have any.
If I don’t use the money for a house, I might save it for a $50,000 machine for my side business. Does that change anything?
@Rex
No, a HYSA is still a great option. I’ve used mine for an emergency fund, house savings, and general savings. It’s simple and effective, especially with current interest rates.
Gentry said:
@Rex
No, a HYSA is still a great option. I’ve used mine for an emergency fund, house savings, and general savings. It’s simple and effective, especially with current interest rates.
I’ll think it over this weekend. The low risk of a HYSA seems like the smart choice right now.
@Rex
Sounds like a good plan. Good luck!
Gentry said:
@Rex
Sounds like a good plan. Good luck!
Thanks for all your help!
@Rex
Avoid stocks or ETFs for this money.
Too risky?
Exactly. HYSA is much safer.
Rex said:
Pax said:
@Rex
Avoid stocks or ETFs for this money.
Too risky?
Exactly. HYSA is much safer.
Are there any rules or restrictions I should know about?
@Rex
Not really. It’s straightforward.
I’m always worried there’s a catch, like hidden fees.
I’m always worried there’s a catch, like hidden fees.
Nope. Low risk, low reward. It’s simple.
I’m always worried there’s a catch, like hidden fees.
Nope. Low risk, low reward. It’s simple.
Is there anything with slightly higher returns but still lower risk than an ETF?
@Rex
You could look at Treasury bonds or money markets.
@Rex
Some HYSAs limit withdrawals, like 6 per month. Double-check the terms before you commit.
Two years is too short to risk the market. Keep it in something safe like Treasury bonds or a HYSA.