6 smart places to put your money in 2023

There is no shame in looking for a safe place to park some of your money.

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the main points

• Consumers have a choice when it comes to securing investments that pay interest, too, from CDs to bonds to savings accounts.
• The amount of interest earned usually depends on the level of risk.
• A good portfolio includes safer and riskier investments.

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Collectively, we’ve been through a lot over the past few years. In addition to the COVID-19 pandemic, we’ve dealt with in a nutshell Recession, High gas prices due to the Russian invasion of Ukraine, and now higher interest rates. No wonder you’re looking for smart places to protect some of your assets in 2023.

We will not suggest any specific investments here. Instead, we’ll cover some of the easiest ways to keep a portion of your money safe.

1. Bonds

Bonds are like debt securities. When you buy a bond, you are lending money to the one who issued it. It may be a company, government or municipality. Whereas the entity you lent the money to receives the money it needs to operate, you receive a promise that the issuer will pay you a set interest rate over the life of the bond. When the bond matures, you get the principal back — plus the interest.

2. Certificates of Deposit (CD)

a Certificate of deposit (CD) is a type of savings account that keeps your money safe for a set period of time. For example, you can put money into a 6-month, 1-year, or 5-year CD. In exchange for letting the bank or credit union hold your money at that time, you are paid interest when the CD is due. Usually, the longer the term, the higher the interest rate you pay.

3. Money market funds

To understand how a money market fund works, it’s helpful to understand how it works Mutual fund Works. When you put money into a mutual fund, your money is pooled with many other investors. All these funds are invested on your behalf by professional money managers. These professionals diversify your holdings so that you don’t have all your eggs in one basket, minimizing your risk.

A money market fund is simply one type of mutual fund. The cash in the Fund is invested in high-quality, low-risk investments. One of the main differences between a money market fund and a money market deposit account which we cover next is that a money market fund is not Federally insuredwhile the money market account.

4. Money Market Accounts (MMAs)

Money market accounts MMAs offered by banks and credit unions. Like other accounts at those financial institutions, MMAs are federally insured. Up to six times a month, you can use the money in MMA to make payments or withdraw cash. The amount of interest paid on MMA is usually higher than the interest paid on savings accounts.

5. A high-yield savings account

If you currently have a savings account, you know your money is safe. The same applies to a High yield savings account. The main difference is that you will earn a higher interest rate with a high-yield account than you would with a typical savings account. The interest rate you pay is variable, which means it will go up or down based on your interest Federal Reserve standard interest rate.

6. Pay off existing debts

If you are carrying high interest debt, push it It is an investment in yourself. Let’s say you have a credit card with a balance of $15,000 and an interest rate of 18%. Paying off that balance is like paying 18% to yourself instead of the credit card company.

Planning your financial future involves a certain level of risk. For example, there are risks involved in investing in the S&P 500, but failure to take some risks also means failing to reap the long-term financial rewards.

Related: Best online stock brokers

The ideal portfolio is a balance of different risk levels. If your goal is to monitor the growth of your money, you will likely want to invest in a mix of riskier assets. Equilibrium occurs when you distribute these risks, so winning investments can help bear bad investments through the natural ups and downs of the market. Adding safe investments to the mix not only protects your finances, but may also allow you to sleep easier at night.