Any money advisors in the house?

[saraseth]

I have some money in a savings account with a 3.15% interest rate. I want to earn as much interest as I can, but still be able to access the money relatively easily, in case I need it for upcoming projects.

I was thinking about putting part of it in a 2 year CD at a rate of 4.5% (I just noticed that the rate went up) and leaving the rest in savings. But if anyone has any better ideas...please put your 2 cents in.

I'm not all that familiar with mutual funds, but I saw a guy on Oprah who said Balanced Funds were good for people who had some risk tolerance, wanted to earn higher interest, and wanted to be able to access their money easily. Of course, I don't want to get a balanced mutual fund just because some random guy on Oprah said so. lol Does anyone know anything about these funds?

Any advice would be much appreciated.

 

[dlavie]

Are you carrying any debt at all? If you are I would put an emergency fund in savings and pay down your debt with the rest.

If you have debt you are probably paying more than 4.5%

Dave

 

[1HotBikerChick]

Mutual funds are good if you get into one that has a "no load" feature. Meaning they don't charge you to open the account but will have a fee for holding the account. Check out www.janus.com or www.franklintempleton.com Both offer great features & are easily accessible. It's been a long time since I paid any attention to my accounts with them but Janus used to have a very small fee--something like $12 a year. One account we had was actually a trust fund for my daughter's education -- which is now spent. We did very well with both; some years we earned as much as 15%--not recently of course. I think we are still earning as much as 9% with our equity fund.

If you put your money into a cd you are locking it away for the term of the cd & will probably have an early termination penalty that would be greater than any interest you would earn during a short period of time. Not a wise investment if you are looking to secure your money but have access to it in case of an emergency.

You may also wat to check a money market account at your bank. They used to be safe, higher (not high but higher) interest investments that allowed the same security as a regular savings but had features of a checking account.

Hope that helps.

 

[nnowick]

It's true that a balanced mutual fund is less risky than a fund that is 100% stock. And it's pretty easy to cash out of most mutual funds. However, the most important thing to understand here is that you can lose money in a balanced mutual fund if the stock market declines OR if interest rates rise. Is that a risk you are willing to take with this money?

 

[saraseth]

Thanks for your responses.

Dave - No, I don't have any debt. Thankfully.

1hotbikerchick - Thanks for the info and the links. I will check them out. 9% interest would be nice.

nnk - Am I willing to risk my money? That's a tough one. With my 401(k) I'm in the moderate-risk category. But with the money I have in my savings, I think I just want to make as much interest as I can with low or low-to-moderate risk.