Home › Forums › Money & Finance › My savings account and CDs are earning almost no interest, any solutions?
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October 31, 2017 8:08 pm at 8:08 pm #1392576BubbyLKWDParticipant
I’m not a savvy investor and i’m not really looking to devote my life to become one. I want safety with my money so i’m not going to invest it in the stock market. I also want liquidity and peace of mind which removes investment real estate from being an option as well.
Is there anything else out there that is very safe but can earn better interest than my savings account and CDs?
October 31, 2017 9:47 pm at 9:47 pm #1392650JosephParticipantThe stock market is one of the safest long term places to invest funds. Put the money into an S&P 500 index fund (or ETF) and sleep well. (Don’t invest in individual stocks or managed funds.)
October 31, 2017 10:11 pm at 10:11 pm #1392664gavriel613ParticipantYou could do as Joseph suggests… but if as you say you don’t want the risk, you could consider asking someone to help you buy a tracker of bonds. If you want extra-low risk then only government issued bonds from countries with good ratings. If you want ultra-low risk, then find a tracker which only has bonds whose maturation date is within the near future, as then you’ll only lose on any bonds from countries which go bust within that timeframe – and since its a tracker it has a large amount of bonds, so in highly unlikely event anything does happen to one countries, you’ll have plenty of eggs in the other baskets. (Just be sure that you use a platform with low charges – otherwise all the interest will go to pay the platform). Obviously the lower the risk, the worse the expected returns.
Another suggestion is to find a peer to peer website which specialises in lending for property, e.g. lendinvest. The advantage of them is that they only lend to someone who has secured the loan to the property (mortgaged their house to the loan). But check you can sell it on or there may not be enough liquidity. (Re chashash Ribbis, ask Rov if you can be someich on Rov goyim)
October 31, 2017 11:05 pm at 11:05 pm #1392702username4ywnParticipantJust as a temporary solution, Ally Bank (an online bank) has a savings account that earns 1.25% interest which is relatively high compared to your average savings account. You can access your money whenever you want and there’s no fees either as I recall
October 31, 2017 11:29 pm at 11:29 pm #1392710yehudayonaParticipantThe Doctor of Credit website has a listing of high-interest bank accounts. I can’t put a link here, but you can google it. Rates are up to 5%.
October 31, 2017 11:29 pm at 11:29 pm #1392711BubbyLKWDParticipantWhile over the long term the index recovers, it can sometimes takes years to recover. If the market crashes 50% in year 1 you need a 100% gain in year 2 just to break even. I can’t afford that.
Safer bonds, not junk bonds are ridiculously low yield.
The peer to peer lending sounds interesting. I have to research the safety and about how easy it is to cash out on the loan.
October 31, 2017 11:54 pm at 11:54 pm #1392739BubbyLKWDParticipantThe account mentioned on Dr of credit allows you to put in a maximum of $5,000. While that’s very nice, I am dealing with 6 figures.
November 1, 2017 12:08 am at 12:08 am #1392747JosephParticipantSix figures and you’re looking for a short term solution?? If you’re looking for a long term solution you won’t find a safer+better return combination than the S&P 500 index.
If you need total safety in returns look at U.S. Treasuries. Otherwise almost any 5 or 10 year period in the S&P will be fine. As far as exceptions, you’ll find more exceptions elsewhere.
November 1, 2017 1:09 am at 1:09 am #1392788jakobParticipantif you want to make a risk-free investment then invest in charity its an eternal investment that can’t go bad & the stocks always go up, you don’t need to check on wall street every day where its holding you know already it went up in value. It also stays with you forever, while all other money is not even worth counterfeit once a person is niftar & heads to the olam Haemes its totally worthless paper.
May hashem give you Hatzlacha to make the right desicion
November 1, 2017 2:18 pm at 2:18 pm #1393703BubbyLKWDParticipantI’m not necessarily going to need the money in the short term. The drawback in investing directly in the S&P 500 index is that I may need the money and I can’t wait for the market to recover. In 2008 people lost so much of their retirement because they needed the money when the market is down. It didn’t help to hear the market will recover, they needed the money now.
November 1, 2017 3:11 pm at 3:11 pm #1393870akupermaParticipant1. We are in a period of low inflation (though tuition and medical costs are an exception). Getting minimal interest in a low inflation period is better than getting much interest in a high inflation period (e.g. money market accounts paid 9% but inflation was 15%). Eretz Yisrael often had inflation so high that it wiped out the currency’s value (that’s why 10000 of current shekels are equal to one lira, which in 1948 was worth several American dollars). Be happy to be in a period of price stability (cf. Pirke Avos on how is rich)l.
2. The more you want to risk, the more higher the return. Right now Venezuelan and Puerto Rican bonds give a very high rate of return, along with high risk they will default and you will lost your money.
November 1, 2017 7:26 pm at 7:26 pm #1394015GadolhadorahParticipantThere are muni bonds with high ratings with minimal default risk….also cettain high grade corporate bonds and preferred shares depending on your risk tolerance….these may get you up to a 3-4 percent return: anything more than that probably has more risk than you should be taking.
November 1, 2017 9:01 pm at 9:01 pm #1394051ShtikaParticipantI invest in real estate in Baltimore, we make about 30% flipping houses. You can also rent out a house or do a complete rehab and sell for a nice profit
November 1, 2017 9:28 pm at 9:28 pm #1394066JJ2020ParticipantHigh returns low risk. Good luck. Either you live with low returns or you learn to stomach some risk. You can’t have your cake and eat it too. If you refuse to take risk and you need more money then save more.
November 1, 2017 10:34 pm at 10:34 pm #1394083GadolhadorahParticipantFlipping houses in Baltimore?? Now thats what I consider a low risk investment for a Bubby. Perhaps she should also consider investing in one of the new Chopsie’s Chulent franchise locations
November 2, 2017 12:28 am at 12:28 am #1394140gildaParticipantWarren Buffett says to invest in stocks in solid companies that yield high dividends that get reinvested- you can also keep putting in every month yourself – thorough a broker there are high fees. When the market falls you get more stocks at lower prices. At the end of the game you’ll have lots of shares. Buying homes and renovating and selling at big profits – you can always hire someone to do it for you.
November 2, 2017 7:43 am at 7:43 am #1394147cowdocParticipantOne suggestion would be to put some of the money into preferred stocks that are trading at about par value( the price that they are redeemed at}. You can get highly rated ones that pay about 4.5%, and the dividends of most non-reit preferred stocks are taxed at a lower rate than the interest on cds and money market accounts. Do this with someone who knows. It is not so complicated and their are sites that rank the preferred
November 2, 2017 4:58 pm at 4:58 pm #1395062BubbyLKWDParticipantAre preferred stock safe from going down? Or just safER than regular stocks?
November 2, 2017 5:23 pm at 5:23 pm #1395073JosephParticipantAre preferred stock safe from going down?
BubbyLKWD: Are you kidding? If you want something “safe from going down”, you should be buying U.S. Treasuries. Because you aren’t going to get better returns than that with that criteria.
Very low risk with high returns simply doesn’t exist.
November 2, 2017 5:24 pm at 5:24 pm #1395077akupermaParticipantIf you want safety, avoid risk. If you want high returns, you risk getting wiped out.
Or you can invest in Torah and Mitsvos, which is risk free and offer good long term returns.
November 5, 2017 12:05 pm at 12:05 pm #1395722SadigurarebbeParticipantflip houses in the next lakewood
November 8, 2017 10:43 am at 10:43 am #1398971meyushavParticipantBecause interest rates in banks etc are so low at the moment, some people have established entities to provide a better return without significantly increased risk. You won’t get double digit rates, but they do beat the banks by a long way.
For instance, some frum guys I know set up Grey Rock Capital (they have a website) which gets funds from people with money sitting around and uses those funds to provide collateralised loans. For instance, they make bridging loans on real estate at up to 70% loan to value, so they get security of 100 for a loan of 70.
November 8, 2017 7:42 pm at 7:42 pm #1399280meyushavParticipantTheir company is called GreyRock Capital Limited (as opposed to Grey Rock Capital Group, which is different).
November 9, 2017 8:05 pm at 8:05 pm #1400826flatbushaskanParticipantNumber 1 rule of investing, only invest funds that you are able to lose. Another rule, the more risk the more return. Why don’t you spend some time with an adviser to choose 10 stocks, all paying dividends, and hold on to them and collect dividends. Diversify your portfolio to decrease unsystematic risk, and you should be fine.
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