16 year old lots of $ nothing do w/ it but save?

Question

Hi,

I have a checking account, and a savings account and I want to save up for a $500 CD account for short term because of the CRAPPY rates. Then I want to save up $1000 from my checking account and use that money to open a Money Market account with minimum of $1000. $500 CD will have no monthly payments and the $1000 Money Market too will have no monthly payment.

Is this a good Idea??????????

My parents will NEVER let me invest or place my money on-line and they said im stuck with my local bank. TCF BANk.

I want to play around with my money...I worked hard for my money and it deserves something better you know what I mean...

BTW I don't need the money until college when Im 18, I want to let you all know IM A BIG SAVER, I NEVER SPEND MY MONEY.

Plus, I get paid around $200-300 once every 2 weeks and will go directly to my bank..

Answer 1

Consider opening a tax deferred College Savings Account.

Answer 2

Patience, friend, patience. Let it accumulate.

Suppose you set a target, say quarterly, so that every three months (assuming your income continues) you buy a new CD. Buy it for a year's term. In the course of time you will have what is called a ladder, a series of CDs that mature over measured periods and in the long term they will tend to average out the rate changes. How this differs from money markets is that you are in essence doing the same thing as buying preferred shares of stock. You have a preset interest rate (as opposed to a dividend) and the money is meanwhile performing such substantial work as helping someone buy a new car or borrow to replace a refrigerator or even help them get by when they go to the bank for a loan after a serious injury or illness sets them back. Money market funds do a bit of this too, but they are more of a liquidity lubricant for the money market, like speculators in the stock and commodity markets.

The money won't be tremendously different, for that matter over the long term CDs will be the better play. But it will put you in an investing frame of mind. You worked for that money, and the CDs in a local bank are working locally for you, the bank, and people who want, or even need, some extra money to do the things they do.

Just a thought. Perhaps it will help by putting a purpose to what you do. Ask your banker what CD money goes to do.

Answer 3

^^ 1st post is a scammer! ^^

You should save in your savings till you have $3k after that invest a % you feel safe in a Roth IRA, Mutual fund and you'll be set.

Answer 4

Listen to your parents, for now. Open the MM account and buy CDs you will see an increase in your funds without the risk.

Answer 5

just keep buying CD's everytime you reach $500 and roll them over to new CD's when they mature - get 1-2 yr CD's since that's how long you have until college - as you get closer - get shorter term CD's - 6/9 months, etc - forget regular savings accts - you'll only make pennies - even the CD's might not match inflation - if you buy a new $500 CD every month, you'll have $12,000 in 2 yrs, plus interest