How to Make Your Money Work for You: Best Short-Term Investments of 2024 - CentZip

How to Make Your Money Work for You: Best Short-Term Investments of 2024

Short-Term Investments: Investing your money wisely is crucial to financial security and independence. With interest rates still at historic lows, you need to make your money work efficiently for you.

If you have excess funds you want to invest for a short period of time, there are several attractive options available in 2024. From high-yield savings accounts to short-term certificate of deposits, Treasury bills, and money market funds, you have the ability to earn higher returns than a standard savings account. The key is choosing the right investment for your financial goals and risk tolerance.

Whether you want to invest for 3 months or 3 years, want low or high risk, the top short-term investments this year can generate good returns while keeping your money accessible. Read on to discover the best ways to put your money to work for you in 2024 through short-term, low-risk investments.

High-Yield Savings Accounts for Short-Term Investing

High-yield savings accounts are one of the safest options for short-term investing. They offer higher interest rates than regular savings accounts, allowing your money to grow at a faster rate.

Look for High APYs

Compare high-yield savings accounts and look for the highest annual percentage yield (APY) offered. Even a small difference in APYs can add up to hundreds or thousands of dollars over time. Some of the highest rates are currently over 2% APY.

Low Fees

Choose an account with no monthly fees, balance requirements, or withdrawal limits. The best high-yield savings accounts are free to open and have no minimum deposit or balance. They allow you to withdraw your money at any time without penalty.

FDIC Insured

Make sure any account you open is FDIC insured for up to $250,000 per account. This ensures your money is protected and you cannot lose your principal investment. Some banks also participate in the Depositors Insurance Fund (DIF) which provides additional coverage.

Easy Access

High-yield savings accounts provide easy access to your money while earning higher interest rates. You can typically open an account online in minutes and link it to your other accounts for convenient transfers. Your money remains liquid in case you need it for any short-term needs.

In summary, high-yield savings accounts are an excellent option for short-term investing. By shopping around at different banks for the highest rates and lowest fees, your money can work harder for you while staying accessible and secure. Within a year, you could earn hundreds of dollars in interest on $10,000 or $25,000 deposited, all at virtually no risk to your principal investment.

Short-Term CDs Offer Small Returns With Low Risk

To earn a modest return without much risk, short-term CDs are a conservative yet prudent option. ###

Certificates of Deposit (CDs) are low-risk investments where you deposit money for a fixed period, typically 3 months to 5 years, in exchange for higher interest than a regular savings account. Your money is very liquid, meaning you can withdraw the full amount once the CD matures without penalty. However, withdrawing money early results in loss of interest and fees.

For 2024, the average CD rates are:

  • 3-month CD: 0.5% APY
  • 6-month CD: 1.0% APY
  • 1-year CD: 1.5% APY
  • 2-year CD: 2.0% APY

While CD returns may not outpace inflation, your principal is insured for up to $250,000 per account by the FDIC. This makes CDs ideal for short-term goals where security and stability are priorities. Compare rates at different banks and credit unions to find the most competitive offers. Consider laddering multiple CDs with varying maturities to balance your needs for access and returns.

For new investors, CDs pose almost no risk of loss and the predictable returns make them easy to understand. However, the returns are typically lower than the stock market and your money may grow at a slower pace over the long run due to inflation and low rates. For higher returns, you must accept more risk. Still, CDs deserve a place in a balanced investment portfolio to provide stability when the markets are volatile.

In summary, while CD returns are modest, they are a simple, low-risk way to make your money work a little bit harder for short-term financial goals. Look for the best rates and ladder different maturities to optimize both accessibility and yield.

Invest in Money Market Funds for Liquidity

Investing your money in money market funds is a conservative yet prudent option if you want to put your money to work for the short term. Money market funds invest in highly liquid, low-risk securities like Treasury bills, certificates of deposit, and short-term commercial paper.##

High Liquidity

Money market funds offer high liquidity, meaning you can withdraw your money at any time without penalty. Your principal investment and any earned interest are available on demand. This makes money market funds ideal if you need access to your cash quickly or want to keep funds on hand for short-term needs.

Low Risk

Money market funds invest in very low-risk, short-term investments, so your principal is quite safe. The securities in these funds have minimal interest rate risk and virtually no credit risk. While money market fund investments typically earn lower returns than longer-term investments like stocks or bonds, your money is not subject to loss of principal or interest rate fluctuations.

Competitive Returns

Although money market fund returns are relatively low, they often outpace regular savings accounts and CDs. As of early 2024, money market fund yields were averaging just over 1% annually. The actual return you earn will depend on current market rates as well as the types of securities your specific money market fund invests in. However, you can expect a marginally better return than a standard savings account with virtually no risk to your principal.

In summary, for short-term investment of funds where liquidity and low risk are priorities, money market funds offer a dependable option. They provide instant access to your money, protect your principal, and generate a small amount of interest—allowing your money to earn a return with minimal risk during the time you need it readily available. Money market funds give you a place to temporarily store your cash while earning mild yields until you are ready to invest for the longer term.

Short-Term Bonds Can Earn You Higher Returns

As an investor looking for short-term opportunities to generate returns, you should consider investing in short-term bonds. Short-term bonds, also known as short duration bonds, are debt securities issued by governments and corporations that mature in one to three years.

Higher Returns Than Savings

Short-term bonds typically offer higher interest rates than regular savings accounts. As of early 2024, high-yield savings accounts are earning around 2% annually. In contrast, short-term corporate bonds are yielding 3-4% or more, government bonds are yielding 2-3%, and certificates of deposits (CDs) are earning 2.5-3.5%. The higher yields provide the potential for solid returns over a short period of time.

Low Risk

Short-term bonds also carry minimal risk compared to equities. Since the bonds mature quickly, there is little chance of substantial price fluctuations. Barring a default, you are guaranteed to get your principal investment back at maturity. The short time frame also means less exposure to interest rate risk. If rates rise in the future, you won’t be locked in for long.

Easy Liquidity

Short-term bonds are very liquid, meaning you can easily sell them on the secondary market for cash before maturity if needed. While you may receive slightly less than the face value, you’ll still recover most of your investment. This flexibility provides more liquidity than longer-term bonds or CDs.

In summary, for investors with idle cash looking to generate modest returns over a short time period, short-term bonds are an excellent option. The combination of higher yields than savings accounts, low risk, and high liquidity offers an appealing risk-reward profile for the short-term investor. By laddering different bonds with varying maturities, you can create steady income streams for the next few years.

Best Place to Invest Money Short-Term? Try a High-Interest Checking Account

One of the best places to invest your money for the short term is in a high-interest checking account. ###

High-interest checking accounts offer competitive interest rates that beat most standard checking and savings accounts. You can earn interest on the money in your account each month without tying up your funds for a long period of time. Unlike certificates of deposits (CDs) or bonds, your money remains liquid and accessible.

High-interest checking accounts allow your money to work for you while still keeping it available in an emergency. You can withdraw money at any time without penalties. The higher interest rates, which currently average between 0.20 to 2.5% annually depending on the bank, can generate extra money each month that you can then reinvest or spend. Some accounts also offer cash back rewards and ATM fee reimbursements.

When choosing a high-interest checking account, compare interest rates and any account restrictions between different banks and credit unions. Some accounts require a large minimum balance to earn the advertised APY, while others have no balance requirements. Look for accounts with low or no monthly maintenance fees. It also helps if the bank has a large free ATM network and 24/7 customer service in case you have any issues accessing your money.

For the best return in 2024, open a high-interest checking account at an online bank. Online banks typically offer higher interest rates than traditional brick-and-mortar banks because they have lower operating costs. Popular options include Ally Bank, Barclays, and Axos Bank. Their accounts are accessible through mobile banking apps, online platforms, and a network of free ATMs.

In summary, high-interest checking accounts provide an easy way to generate monthly income on money you need to keep liquid. Do some research to find the most competitive rates and account terms. Then open an account, fund it, and start earning interest each month on money that would otherwise sit idle in a standard checking account. Your money can start working for you with almost no effort on your part.


As you’ve seen, there are several attractive options for short-term investments in 2024 that can generate solid returns over 6-12 months while keeping your money accessible. Whether you choose a high-yield savings account, short-term CD, money market fund, or short-term bond fund, the key is to start investing as much as you can as early as you can. Compounding interest and time in the market are two of the most powerful tools for building wealth.

If you develop the habit of consistently allocating money each month to these short-term options, you’ll be well on your way to making your money work for you and achieving your important financial goals. The time will pass anyway, so you might as well put that passing time to work creating value. Take that first step today and open an account to start investing in your future. Your future self will thank you.

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