Question for the Money Doctors

Question submitted on Feb 7, 2023.

Question

I have 50,000 dollars in a bank account and I add 1,700 dollars each month. I'd like to put the money in a safe place and earn interest. What are my best options?

Answer

This will depend upon your needs and goals.   If you are looking for a safe place to park some money, please consider the I Bonds.  You can get them through:

https://www.treasurydirect.gov/savings-bonds/i-bonds/

You are limited to $10,000 in I Bonds.  They are currently paying 6.89%.  You can also get another $5,000 from your federal tax refund via Form 8888.  If your refund is not that much, you can make an estimated payment to get your refund to at least $5,000 so you can purchase the I Bonds.   That takes care of $15,000 of this cash.

Depending on your goals and needs, you should consider dollar cost averaging into a low cost mutual fund.  The specific mutual fund will depend upon how much risk you are willing to take and your time horizon with the money.

For additional information visit //www.360financialliteracy.org/