Short Term Investments

A short-term investment is a type of investment that matures and produces a yield within a short period of time, usually less than a year. Understanding the different types of short-term investments can be difficult and choosing the right short-term investment for your needs can be a bit tricky. Choosing the best short-term investment for your money will often depend largely on your personal preferences.

Below are a few of the most common types of short-term investments, along with their pros and cons.

Savings Accounts

A savings account is by far one of the simplest and safest types of short-term investments. It`s generally very easy to open and maintain a savings account. Usually, all you need to do is go to your local bank, fill out some paperwork and deposit your money. With a savings account, you also have access to your money any time you need it, which is great for emergency situations. Your money is also insured when it is in a savings account, making it a short-term investment option with little to no risk.

Savings accounts typically have very low interest rates, however, which means that they have lower yields. If you are looking for a short-term investment with a high yield, a savings account may not be your answer.

Certificates of Deposit

Certificates of Deposit are often referred to as CDs and they are considered to be a very safe short-term investment option. Since CDs typically have higher interest rates than savings accounts, they also produce higher yields. When investing in CDs, however, keep in mind that you will not be able to easily access your funds until they mature. There is often a stiff early withdrawal fee for these.

Money Market Accounts

Like savings accounts, money market accounts are also considered to be very simple and safe short-term investments. Money market accounts are easy to open and your money is typically insured. A money market account usually has a higher interest rate than a savings account and therefore it has a higher yield.

One of the biggest drawbacks of a money market account, however, is limited access to your funds. You will usually only be able to move a handful of transactions each month. If you exceed the number of allowable transactions, you will often have to pay a hefty fee.

Money Market Funds

A money market fund is a type of low risk mutual fund. Investors will usually have access to their funds, if necessary. Money market funds, however, are not usually federally insured. These types of investments usually have some risk, but that risk is generally very low.

How to Choose the Right Short-term Investment Option

Before choosing a short-term investment, you need to ask yourself a few questions. First, are you looking for a lower risk or a higher yield? You should also decide whether or not you will need to access your funds in case of emergency, since this can be difficult with some short-term investments.

Thoroughly investigate any financial institution before you trust it with your money. You may also want to look at some of the other options available to you as well. Some financial institutions, for instance, may give you the opportunity to refinance your mortgage. Before you consider this, however, be sure to calculate your new payments and other mortgage costs with a mortgage calculator.



There are many choices for someone who wants to invest their money. One of the more common choices out there is called Class C investments. These are shorter term ones that will provide less of a return but can be accessed in a much shorter amount of time. These shares are known as level load funds, and they perform very well when you want to invest money for short term goals. There are various pros to getting class c shares, including the fact that there are no front end fees, and there is always a chance to avoid the back end fees. These shares also have the added benefit of a lower expense ration than class B shares. Like all investing options, however, it is vital to learn about these before you consider putting money towards them. Here are some of the basics to remember when investing.

  1. Learn, Learn, Learn: No matter who you are, knowledge always translates into power. Not only does knowledge make it easier to see issues and address them early, but it helps you get more for the initial step. Regardless of if you choose class c investments, or class a ones, make sure that you learn everything that you can about the market and investing in general before you even think about putting your money into action.
  2. Check Around: New opportunities present themselves often, but you have to be careful to avoid jumping on the bandwagon just because someone tells you to. This is vital to your financial health, as you can often lose tons of money by jumping in before you have looked around at all the other options. This is true with all aspects of life, especially investing.
  3. Hire Help: Getting help when you are starting out is priceless, especially when you are talking about investing large amounts of money. There are professionals out there that have tons of experience in the financial field, and you can easily use their experience to make money for yourself. Check out a few different professionals before settling on the one to hire, but never hesitate to hire help when you need it.
  4. Questions are Gold: It might seem stupid, but it is vital that you get every one of your questions answered before you put your money into something. There are many ways to get answers, but the net is one of the best resources that you have. Not only can you learn about investing here, but you can ask questions and find answers to just about anything you can think of, regardless of how small or insignificant it might seem.
  5. Be Confident: Second guessing yourself can end in trouble, especially if you consider the fees that are generally associated with trading and stocks. Make sure that you do your research first, and be confident in the investment choices that you finally decide on. In the end, this can save you time, heartache, and trouble.

Investing is a complicated process, especially when you consider class c investments, class a investments, and the many other types of investing that go on daily. Keep these tips in mind so that you can move ahead with your financial plans and not have to worry about monetary issues. In the end, it will guarantee that you rest easy and see growth in your original investment choices, which will provide not only a bright financial future, but success in all of your financial endeavors.