Today, getting information about how to invest money online has increasingly become the norm than the exception. Looking here surfaces several exciting ideas worth considering when looking to build a diversified portfolio for beginner investors.
1. Emergency Fund
Having an emergency fund can help if you need to leave a toxic job, fly last minute to say goodbye to a grandparent, or have an unexpected medical issue.
2. Checking Account
Putting your money in a bank account is an excellent way to establish a history with the bank. Most checking accounts don’t provide competitive interest rates, but many credit unions and banks offer other benefits, like a debit card, access to loans, and financial education.
3. Savings Account
Most banks also offer savings accounts, which is an excellent place to put cash on hand you don’t want to spend (but aren’t quite ready to invest.) Like checking accounts, savings accounts likely won’t have competitive interest rates unless they are a designated high-yield savings account.
4. High-Yield Savings Account
High-yield savings accounts are similar to checking accounts, but they offer a slightly higher interest rate. This means you can potentially earn more than your regular bank account, which is why it’s essential to compare the rates offered by different banks before opening a new one.
5. Retirement Plans – 401k
The most common retirement plan employer’s offer is a 401k. A 401k is a type of retirement plan that allows you to put away money before it gets taxed and invest it.
6. Retirement Plans – IRA
Another type of retirement plan is called an individual retirement account or IRA. An IRA is a type of retirement plan that lets you save up to $6,000 per year (or $7,000 if you are above age 50.)