7 Best Short Term Investment Ideas
Got some money you want to make more money with?
Today, I want to share with you some really awesome short term investment ideas.
These investments are meant to make you money for the short term, and isn’t meant to be a way for you to grow money long term.
Sometimes we just need to make money from our cash without tying it up long term.
If this suits you, then definitely go through this list of 10 great short term investment ideas.
First though, what is “short term?” The short term could mean different things to different people. But in this list here, the short term will be a few months to a few years. So the investment ideas you’ll see here are meant to make you money for just a few years.
Top 7 Ways To Make Money With Short Term Investments
1. Peer To Peer Lending
Peer to peer lending is when you become the lender! Traditionally, people go to banks to get loans, or other financial institutions that lend money.
With Peer to Peer lending, you become the bank! You will loan money out to every day people who need a loan, and you will collect the interest and make money from the stash of cash you already have.
It’s up to you how much money you’d want to lend out. How much money you can lend out starts at a few hundred dollars typically, however, it can up to well over ten thousand dollars. How much money you can lend out depends on the company you work with.
Expect to earn roughly 5% interest rate on your loaned out money. This is roughly the average rate of return for peer to peer lenders Propser and Lending Club. You can obtain a higher rate of return by choosing to lend out to riskier people (less creditworthy people), however, you will also increase your risk because statistically, these people are more likely to default on their loans.
How do you become a peer to peer lender?
To become a peer to peer lender, you need to sign up with a peer to peer company that will connect you (the lender) with borrowers who are looking for the amount of money you want to lend out.
A very popular peer to peer company is called lendingclub.com. I recommend using them.
2. Sign Up For A Rewards Credit Card With Massive Bonuses
The credit card business is BIG business, and they are very aggressive when it comes to attracting new customers.
Some of the most popular credit cards are reward credit cards. The best rewards credit cards come with very high bonuses just for signing up. For example, a travel reward credit card can give you enough reward points to get a free flight anywhere in the U.S. – just for signing up! Interested in learning more?
If you want to check out the 10 best travel rewards credit cards, click here.
You can also use these credit cards to buy every day items like iPods and gift cards, but if you get a travel rewards credit card, your best bang for your buck is to use it for free flights, free hotel stays at luxury accommodations, or purchase all-inclusive cruises or vacations.
It’s a sick deal. and hardly an investment at all. Just collect your sign up bonus and use the card! Or cards if you want to get more than one.
3. Purchase Short Term Bond Funds
If you’re looking to make more money in the short term while keeping your capital relatively safe, then short term bonds could be a good choice for you. There are many different types of bonds you can invest in and they also have various maturity dates. You can choose bonds with the level of risk and maturity dates that make sense for your situation.
It’s a bit complicated to explain how bonds work and what the different types of bonds are quickly. I recommend reading more on it before you dive in.
You can purchase bonds through financial institutions like your bank or financial advisor, or you can purchase them yourself with a brokerage account if you’re a do it yourself type of investor.
If you want to learn more about bonds, this video from Investopedia is good start.
4. Open A Certificate Of Deposit Account
A certificate of deposit (CD) is money you will put in an account that will be locked away from you for a set period of time. The period of time will vary a month to 10 years typically.
You get to choose how long yo want to keep your money locked away. Typically, the longer you keep your money locked away in a certificate deposit account, the more interest rate you will earn.
From the banks perspective, they are willing to pay you more interest for your money if you are willing to guarantee the money to be with them for a longer period of time, because they have guaranteed funds to make more money with (like using your money to lend out to borrowers at higher interest rates).
But you in the meantime will get a higher interest rate than a typical savings account, making you money in the short term.
Overall though, this isn’t going to earn you a lot of money in interest rate. CD’s don’t pay large amounts of interest. Expect anywhere from 0.15% to about 2%, depending on the bank.
5. Open A Money Market Account
A money market fund is a type of investment that makes you a little bit of money in the short term. It’s a type of investment that is usually really safe. It has low risk, and with low risk comes low returns. It’s an ideal fund for someone who is looking to keep their investments safe and doesn’t need large growth. Perhaps older people who are set to retire soon, for example.
6. Open An Online Checking Account
If you want to keep your money super safe and want access to it anytime, and want to make more money than a typical checking account, then consider opening an online checking account.
An online checking account can be described as an account that requires very little maintenance from the company that maintains it, so they can offer you a little more interest with these accounts.
It’s not huge, but expect anywhere from 0.10% to around 1%. It will completely depend on the bank/financial institution you deal with. This is a very safe way to earn a little bit of money in the short term.
7. Open An Online Savings Account
An online savings account is very similar to an online checking account. It’s a place to put your money that you’re not using, and instead of earning virtually zero interest rate, you’ll at least be earning something.
The minor difference between a checking account and savings account is that a savings account traditionally has been meant to be for “savings”. So you put your money in and leave it. But nowadays, checking and savings account kind of work very similarly, in that many people use them daily to perform transactions like withdraw money.
Some savings accounts have special restrictions like limiting you to a certain number of withdrawals a month. But otherwise, if you want to earn a small interest rate safely in a set and forget type of way, an online savings account could be your answer.
A pretty good average percentage yield (APY) for an online savings account is about 1%. Again, this is usually a lot higher than your typical savings account you’d find at your local bank – so while 1% isn’t that exciting, it’s still better than similar alternatives, and makes a great short term investment.
A lot of banks you’ve come to know will offer these high interest online savings accounts, so check with them if you’re interested.