You know how it goes. Many times you get a big lump sum of money, and you already know where it’s going, and before you know it, you don’t have anything left. What if there was a way to make more money in the long run if you just sacrificed one of those material things you wanted to get with your big tax refund? Do you really need that fancy brand new car? Or can you get by with one that gets you from point A to B? If the second choice was your option, then you can easily save your money to get you further ahead in your future. In this guide, we’re going to give you some of the best places to invest your tax return money so you end up on top.
- Personal Savings Accounts
Of course personal savings are great. You can literally go to just about any bank or credit union and open a savings account so you can get an FDIC protected savings accounts. However, you want to make sure that you don’t use it as much as possible, as sometimes banks can charge a monthly maintenance fee depending on your number of transactions each month.
- Higher Yield Savings Accounts
These bank accounts are also an FDIC savings account, but they have a higher interest rate. Many times, these are the savings accounts offered if you already have a savings or checking account with that bank. There are some online high yield banks as well, but you have to be able to have transfers to a regular bank account verified.
- Get Your Certificates of Deposits
Investing in CD’s has been an option for many years. A Certificate of Deposit is also insured by the FDIC, but the main thing that you have to worry about is that you have to keep the money in them for a length of time, otherwise you can be charged a penalty fee (like losing so many months’ worth of interest).
- IRA’s (Save For Your Retirement)
IRA’s are also a popular way to save. You can literally use these similar to a CD. The only difference is that this is strictly meant for your retirement fund. It’s a great way to prepare for your future.
- Cryptocurrency (Bitcoin)
Even though some people don’t consider this an option, Bitcoin is worth thousands of dollars. It’s been around for about 20 years now, and even though the price fluctuates (there have been times it’s dropped to about 2,000 for one bitcoin) like the stock market, it has proven it’s here to stay, and that in its peaks, you can withdraw it and re-invest continuously over periods of time to capitalize your gain. Just make sure you have a “local wallet” that can easily keep your bitcoin secured.
No matter what you choose when it comes to investing in a future fund, you want to make sure that you keep an eye out for any hidden fees, and the goal is to save. Saving is one of the hardest things that many people face trying to do, but it’s not impossible at all with the methods listed above. You will also want to make sure you are using a reputable company like Compass Wealth Partners if you are hiring someone to help with the financial planning.