5 Best Short-Term Investments for Generating Income
Higher interest rates also mean better income generating opportunities and this week's edition of U.S. News Invested is dedicated to just that very topic. Enjoy the weekend.
Investing isn't a one-size-fits-all proposition; the core principle of investment portfolio construction lies in aligning your financial choices with your unique objectives and time horizon. For example, if you're investing for retirement and have several decades to go, you'd generally prioritize long-term growth.
However, if your investment goals are more immediate – say, you're saving for a home down payment within the next few years – the investment landscape shifts. In this scenario, the focus typically moves from capital growth to capital preservation and income generation.
Here are five of the best types of short-term investments for generating income, according to experts:
1. Treasury bills, or T-bills, are short-term debt securities issued by the U.S. government. When investors purchase a T-bill, they're effectively lending money to the government. In return, the government agrees to pay back the full face value of the bill upon its maturity.
2. "Certificates of deposit, or CDs, are time deposits offered by banks with a fixed term, typically ranging from a few months to several years," says Taylor Kovar, CEO and founder at Kovar Wealth Management. "They provide a guaranteed interest rate, making them a safe and predictable investment."
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