What should i do with my money to get the msot interest and help finding interest ammounts?

Question

i will soon have $1000. that is the minimum that my bank and several places online that i have checked will offer higher rates for...so what should i do to get the most money in the shortest amount of time. my bank offer the following: 5 month liquid certificate at 2.6 percent APY; 18 month certificate at 3.5 percent APY; or "[any amount of months] certificate or IRA" at 1.25 percent APY...i have no idea what any of these mean and no idea how to find out them..can you tell me what they would bring me on $1000 after however many months..also ive seen some good rates online like here http://home.ingdirect.com/products/products.asp?s=OrangeCD where theres 3.7 percent for a year...do i have any other optiinos beyond CDs that would be better...thanks any advice is appreciated

Answer 1

Even at as much as 4% APY, well above the numbers you quoted, a $1000 investment will only net about $40 after an entire year. As it happens 4% is the number often used as an estimate of the rate of inflation over a given year. If you're setting this money aside as a rainy-day fund it's best to put it somewhere you can maximize your rate of return while maintaining easy access to it (but perhaps not too easy, if you feel you might be tempted to spend it frivolously) without penalty, but as an investment you'd probably be better served elsewhere, rather than possibly losing value due to inflation.

Answer 2

Find a credit union.  They pay the highest interest.