By: Select Preferred Network
Top Five Ways To Invest Your Stimulus Check
Did you get your stimulus check of 1400 dollars? While this check from Uncle Sam won't make you rich overnight, it is enough to think about making some smart investments.
Of course, these are tough times, and you may need this money for more pressing matters but, if you are in a situation where you can save some or all of this money, we have some smart investment suggestions for you.
Top 5 Ways to Invest Your Stimulus Check
Here are the top 5 ways to invest your stimulus check instead of just letting it sit in your checking account doing nothing.
1. Open or Fund a High-Yield Savings Account
A high-yield savings account is a great way to put away your stimulus check money if you are unsure of what to do with it. It allows you to have an emergency fund readily available when you need it while compounding the most interest you can get out of a savings account.
It essentially offers risk-free interest earnings. However, a high-yielding savings account is not a good long-term investment due to fluctuation in earnings and inflation.
2. Open or Fund Your Health Savings Account
If you do not have a Health Savings Account (HSA), you should get one and use your stimulus check to put money in it. An HSA is for your medical needs, and it gives you plenty of tax benefits. Firstly, any money you put in your HSA is tax-deductible.
Secondly, the interests you earn on the account are also tax-free. Lastly, when you withdraw money for medical purposes, that money is tax-free as well.
3. Open or Fund Your Roth IRA
Opening and funding a Roth IRA is a great investment if you do not need your stimulus money for many years to come.
If you were eligible for a stimulus check, you are well under the annual income ceiling of a Roth IRA. You can put your stimulus money(non-taxable) in your Roth IRA, which has no taxes on growth and allows you to make tax-free withdrawals in retirement.
4. Invest In The Stock Market
While 1400 dollars is not nearly enough to buy you even a single share of a top-performing stock, it is enough for you to invest in fractional shares. It is a smart way to invest in a stock you believe can make you money over time.
Do some market research before you invest and avoid penny stocks as they are highly risky.
5. Invest In Index Funds
If market research is not your thing, you can invest your stimulus check in index funds like the S&P 500 index funds. These are an index of the top 500 stocks, and you are investing your stimulus money in the American economy, which has historically been an excellent performer.
Your stimulus check is yours to do whatever you want with it. However, if you have money left from it or don’t need the money at all, the mentioned top 5 ways to invest your stimulus check are well worth considering.