What do you want to do this summer? Week holiday in Boracay Would you like a one? What do you want to buy within the next few months? Do you want to buy a new smartphone? What about next year, or two years from now? Do you want to buy a motor car? Start your own business? Pay that downpayment for your dream home? It doesn’t matter what you would like to do, or what you want to buy, as long as it’s happening in three years time or less, then it’s considered a short-term goal.
And when it comes to short-term goals, they are the best investments where you can put your cash in. Yes, a savings account is theoretically an investment because it earns interest over time and always much better than leaving your cash under the mattress. It’s a great spot to put your cash for your short-term goals because it’s almost zero risk, with bank or investment company closure and inflation as the only reason you’ll lose money (or the worthiness of your cash). When should you invest in a savings account? When your goal is defined to significantly less than a calendar year. Where in the event you invest?
At any economically stable commercial bank or investment company so that the risk of bank or investment company closure is almost negligible. Which kind of savings account in the event you open up? A passbook savings account is alright, but ask your bank or investment company if they have similar products which have better interest levels. Time deposits will be the most popular kind of investment among Filipinos, in my observation. Your cash makes at higher rates of interest than a checking account in exchange for some liquidity.
But just like the former, time debris are almost zero risk. When should you choose short-term time deposit account? Whenever your goal is defined to 3 years or less. Where should you invest? Shop around and see which banks can provide you acceptable terms. If you’re looking for the best interest rates, then rural banks will have the best offer, but understand that they are less stable than commercial banks. What type of short-term time deposit account should you open? It depends on your goal.
If it’s significantly less than a year, i quickly suggest a 90-day (or shorter) time deposit. If it’s greater than a year, then you can go for the 6-month or annual term. Pooled funds are either Unit Investment Trust Funds (UITF) or mutual funds. Your cash has the potential to earn higher than a period deposit accounts, but you’re already subject to possible loss if the marketplace falls by enough time your goal deadline comes.
- Bonds have a lesser expected come back than stocks, and therefore sometimes a lower tax cost
- Any security or collateral is requested,
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But historically, the worthiness of devices or shares in low-risk pooled funds rarely dip unless an enormous financial crisis happens in the country. So if the economy looks good, or even just “flat”, then low-risk pooled funds turn into a good investment choice in the short-term. When should you invest in low-risk pooled funds?
When your goal is defined to 1 1 year or even more. Where should you make investments? For UITFs, you can just go to any commercial bank or investment company. For mutual funds, go to any SEC-registered mutual fund company. Which kind of low-risk pooled money should you purchase? The most common types are the Money Market Fund, Fixed Income Fund, Government Securities Fund, and short-term Bond Funds.