About Gina Boykin Expertise Financial planning, debt management & credit cards, stock investments, mutual funds, bonds, foreign exchange(forex), and saving money tips.
If I don't know something I will do my best to research and give you objective and relevant answers.
Education/Credentials B.S. Degree and 10 years of experience in Accounting and Audit. 10 years experience investing in stocks, mutual funds, bonds, real estate, options, and forex
Question I have $6000 setting in my savings acct. so I can get to it quick if needed. Work is slowing down and I really am not sure of what is next. This money is seperate from my 401k. I am still working 4 and 5 days a wk. but word is maybe 3 or even less including a layoff--I do feel the company is trying to help. Forgot the question--Is there some place else I can put the money so it will grow? and still get to if I need. I live in an extremely small town. Thank you for any help
Answer Based on what you've told me, it sounds like it is more important to have the money safe and sound. There is a greater risk of needing the money sometime soon than the risk that you will somehow "miss out" on an opportunity to make money with those savings. Unless you already have a 6 month (or larger) emergency fund sitting somewhere else in savings, then the best place you can put your $6,000 is a high interest earning savings account or a money market account (MMA). A money market account is like a checking account that pays interest, so you can still write checks if needed, but usually there is a limit (e.g. 6 checks or withdrawals per month) on the number of transactions you can make in the account.
If you have your money sitting with one of the big banks, you are probably getting interest of less than 1/2 of 1 percent. You can at least bump that up a little by checking out the highest rates at www.bankrate.com, or local credit unions (which typically offer higher rates than regular banks. Even going from 0.5 percent to 2 percent means you're getting 4 times as much interest!
CDs have a penalty for early withdrawal; however, depending on how much money you would need to survive each month, you could split the money and put 1/2 in a short-term CD (3-6 months) and the other half in savings/MMA.
Once things are more stable with your employment, you can eventually look into putting money in a Roth IRA if you'd like to do some investing in stocks/bonds/mutual funds. A Roth IRA is primarily for retirement, however, after you've had the account open for 5 years, you are allowed to take out your deposits tax-free and penalty-free. (Any earnings your deposits have made may be able to be withdrawn without penalty too, in some circumstances.) Some people like to use a Roth IRA as an extra cushion for emergencies, while saving for retirement. You can set up a Roth IRA easily with any of the major brokerage companies like Fidelity and Vanguard and you have hundreds, if not thousands, of investment options. When you're ready to look into a Roth IRA, you should STILL have a separate emergency fund in savings.
