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Question from my 12 yr. old

June 1st, 2007 at 05:15 am

He has approx. $1200.00 in a savings acct. that he does not touch. He also has another acct. started for a car when he turns 16. This acct. has approx. $700.00. My husband and I are going to match this amount when he goes to purchase his car. Now his question is how should he "invest" his money. He wants to get CD's, but I know there has to be something better out there that earns better intrest. Anybody have any suggestions?

3 Responses to “Question from my 12 yr. old”

  1. Nic Says:
    1180702973

    Does your bank/credit union offer money market accounts? Mine offers it at 5.15%...Zions National? You too can sign up for it on line. Or,Emigrant,Ing, etc....lot of on-line banks offer good returns. Another option, mutual funds,index funds,stocks etc. Might be fun for your son to do the research on investments that interests him.

  2. fern Says:
    1180709288

    looks like an excellent opportunity to learn some investment lessons, the tradeoffs of risk and return, etc. by comparing CD rates to money market to mutual funds possibly, but to make sure he understands the difference between the guaranteed bank rates and the non-guaranteed mutual funds, say.

  3. disneysteve Says:
    1180715307

    I think for a goal that is only 4 years away, the stock market is not the place to be. I'd stick with a high-interest money market or CD. The CD is probably the better way to go right now because there is a strong feeling that the Fed might lower rates soon so MMF rates would drop. Now is a good time to lock in the higher CD rates. He can take a 3-year CD and be protected from any fall in rates.

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