3 Best Investment Options You Can Make For Your Short-Term Goals
If you have plans that must be accomplished in three years or less, you should look at the appropriate investments that are best for short-term goals. Investments suitable for short-term goals are meant to be more stable and liquid.
Liquid assets are investments that can be converted into cash quickly and easily. Real estate is NOT a liquid asset because it may sometimes take years to sell it. Examples of liquid assets are savings with interest rates, cash equivalents, and more. In this article, we listed your best investment options for short-term goals that you plan to achieve in 3 years or less.
1. High-Yield Savings Account
A high-yield savings account is basically money saved in a bank that earns a higher interest rate. Generally, online or digital banks tend to give higher interest per annum compared with brick-and-mortar banks. In the Philippines, high-yield savings account with an interest rate between 3% and 4% will help you grow your money more quickly. Here are a few banks to consider if you’re looking for a high-yield savings account:
- Tonik Banks Stash
- CIMB GSave
- DiskarTech by RCBC
- Komo by EastWest
- Citibank Peso Bonus Saver
2. Cash Management Accounts (CMA)
Cash management accounts combine the benefits of checking and savings accounts into one convenient package. The idea is that CMAs offer the interest of a savings account while having the flexibility of a checking account. It helps you manage your money and payments while also earning interest. You can check banks or online brokerages and robo-advisors to open a cash management account. CMAs managed by online financial companies have lower service fees compared with traditional bank accounts. It’s great for short-term goals because it’s liquid, safe, incurs lower fees, and earns interest rates.
3. Time Deposit
A time deposit is a bank account that earns interest and has a date of maturity. Essentially, banks secure your investment account for a set period of time to allow your money to grow at a more stable interest rate. As a result, your return on investment (ROI) is simpler to predict than it would be with a typical savings account.
When inquiring about a time deposit, look at the maturity period. Short-term deposits mature between 1 to 12 months, depending on the bank. Meanwhile, a long-term deposit takes 1 to 10 years. According to Grit.ph, the best banks to open a time deposit in the Philippines are:
- Tonik Bank
- Security Bank
- EastWest Bank
- Maybank Philippines
Whether you’re setting money aside for a business or your child’s education in three years, it’s best to make wise investments for the future. Research and learn more. Good luck!