You have $1,000 saved and you’re trying to figure out what to do with it. It would be a significant amount of money to splurge and spend all at once — but is it enough to invest? The truth is, $1,000 is a great place to start investing and can make a difference in your financial health.
Below, CNBC Select suggests several ways you can invest $1,000 and explains how to decide which option may work best for you. Some investments might offer greater returns, but they also come with greater risk. If your financial safety net allows for this risk, such investments are worth considering. If not, you can use your $1,000 to correct that.
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1. Build an emergency fund
An emergency fund is crucial to your financial health. When you’re facing unexpected expenses, such as job loss, medical expenses or surprise home or car repairs, your emergency fund will keep you from straining your budget or going into debt.
A good place to park your emergency fund is a high-yield savings account. This way, you’ll get guaranteed returns in the form of compound interest. Some high-yield savings accounts are now offering around a 5% annual percentage yield (APY) — a return we haven’t seen since the 1990s. Plus, these accounts are usually FDIC-insured so they are virtually risk-free.
Here are a few high-yield savings accounts we recommend:
At this time, there is no limit to the number of withdrawals or transfers you can make from your online savings account
Excessive transactions fee
Overdraft fee
Offer checking account?
Offer ATM card?
Terms apply.
2. Pay down debt
If you have credit card debt, paying it off should be your priority, especially in a high-rate environment.
Let’s say you have a $1,000 balance on a credit card with a 20% APR and only make a minimum payment of $25 each month. The balance will take you 67 months to pay off and you’ll lose $661 to interest. Or you could pay the whole balance off instead and not worry about interest charges at all.
If you owe considerably more, you may feel as though $1,000 would barely make a dent in your card debt. In that case, you may also want to look into a 0% APR credit card or debt consolidation loan to save on interest charges. The Wells Fargo Reflect® Card, for example, has a 0% intro APR for up to 21 months from account opening on purchases and qualifying balance transfers (then 17.74% to 29.74% variable APR).
0% intro APR for 18 months from account opening on purchases and qualifying balance transfers. Intro APR extension for 3 months with on-time minimum payments during the intro period. 17.74% to 29.74% variable APR thereafter
Regular APR
17.74% to 29.74% variable APR on purchases and balance transfers
Balance transfer fee
Introductory fee of 3% for 120 days from account opening, then up to 5% ($5 minimum)
Foreign transaction fee
Credit needed
Excellent/Good
3. Put it in a retirement plan
Another aspect of your financial life you want to cover is your retirement funds. If your employer offers a 401(k) match, you may be missing out if you’re not taking full advantage of it. Further, it’s good practice to save 15% of your annual income for retirement (including any contributions by your employer). If that seems like a lofty goal to you at the moment, contributing $1,000 can definitely make a difference.
If you don’t have an employer-sponsored retirement plan, you can always invest in an individual retirement account (IRA) instead. The IRA contribution limit for 2023 is $6,500, or $7,500 if you’re 50 or older.
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No account minimum for active investing through Schwab One® Brokerage Account. Automated investing through Schwab Intelligent Portfolios® requires a $5,000 minimum deposit
Fees
Fees may vary depending on the investment vehicle selected. Schwab One® Brokerage Account has no account fees, $0 commission fees for stock and ETF trades, $0 transaction fees for over 4,000 mutual funds and a $0.65 fee per options contract
Bonus
Investment vehicles
Robo-advisor: Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™ IRA: Charles Schwab Traditional, Roth, Rollover, Inherited and Custodial IRAs; plus, a Personal Choice Retirement Account® (PCRA) Brokerage and trading: Schwab One® Brokerage Account, Brokerage Account + Specialized Platforms and Support for Trading, Schwab Global Account™ and Schwab Organization Account
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No minimum to open a Fidelity Go account, but minimum $10 balance for robo-advisor to start investing. Minimum $25,000 balance for Fidelity Personalized Planning & Advice
Fees
Fees may vary depending on the investment vehicle selected. Zero commission fees for stock, ETF, options trades and some mutual funds; zero transaction fees for over 3,400 mutual funds; $0.65 per options contract. Fidelity Go is free for balances under $10,000 (after, $3 per month for balances between $10,000 and $49,999; 0.35% for balances over $50,000). Fidelity Personalized Planning & Advice has a 0.50% advisory fee
Robo-advisor: Fidelity Go® and Fidelity® Personalized Planning & Advice IRA: Fidelity Investments Traditional, Roth and Rollover IRAs Brokerage and trading: Fidelity Investments Trading Other: Fidelity Investments 529 College Savings; Fidelity HSA®
Investment options
Stocks, bonds, ETFs, mutual funds, CDs, options and fractional shares
Educational resources
Extensive tools and industry-leading, in-depth research from 20-plus independent providers
Terms apply.
4. Open a certificate of deposit (CD)
Let’s say your emergency fund is in good shape, you’re on track to contributing to your retirement plan and you have no high-interest debt. Yet, you’d rather not take on risk when it comes to your money.
In this case, you might want to look into certificates of deposit (CDs). This type of deposit account earns a fixed interest rate for a specific amount of time on the funds you deposit when you open an account. The term lengths typically range between three months and five years. Longer terms tend to come with higher APYs but with a traditional CD, you can’t withdraw your money before the end of the term. Otherwise, you’ll generally have to pay an early withdrawal penalty.
Interest rates on CDs are often higher than those on regular savings accounts. This means you might get better returns at the trade-off of no easy access to your cash until the maturity date. But if you already have an emergency fund parked in a more accessible account, putting extra money aside in a CD can be a good move.
At the time of writing, the following accounts are offering some of the best CD rates:
For 3-month CD: 2.25% APY; higher APYs may be available for longer terms, click Learn More for details
Minimum balance
Monthly fee
Early withdrawal penalty fee
For 3-month CD: 90 days interest, whether or not earned
Terms apply.
APYs are subject to change at any time without notice. Offers apply to personal accounts only. Fees may reduce earnings. For CD accounts, a penalty may be imposed for early withdrawals. After maturity, if your CD rolls over, you will earn the offered rate of interest for your CD type in effect at that time.
For 5-year CD: 4.25% APY; higher APYs may be available for other terms, click Learn More for details
Minimum balance
Monthly fee
Early withdrawal penalty fee
For 5-year CD (or any CD that is 49 months or longer): Equal to 150 days of interest
Terms apply.
5. Invest in money market funds
Kenneth Chavis IV, CFP and senior wealth manager at LourdMurray, suggests money market funds “for those who are not comfortable with investment risk but want to earn some interest on their money.”
Money market funds (MMFs) invest in lower-risk debt securities, such as U.S. Treasury bills and commercial paper, and are considered some of the safest investments. MMFs pay monthly dividends. The yield is typically close to or a little higher than on bank savings accounts. This is also a highly liquid option — you can withdraw the money you’ve invested at any time.
You can buy money market funds from a bank, fund provider such as Fidelity Investments or Vanguard or by opening a brokerage account.
Speaking of Treasury bills, they’re also a low-risk investment since they’re backed by the government and give you a guaranteed return over a set period of time.
“You will get a nice guaranteed rate dependent on how long the maturity is (assuming you hold until maturity) and you will not owe state income tax on the interest,” Chavis says.
Since there’s a maturity period, this option provides less liquidity than money market funds. At the same time, the term can be very short — from just a few days to a year.
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No account minimum for active investing through Schwab One® Brokerage Account. Automated investing through Schwab Intelligent Portfolios® requires a $5,000 minimum deposit
Fees
Fees may vary depending on the investment vehicle selected. Schwab One® Brokerage Account has no account fees, $0 commission fees for stock and ETF trades, $0 transaction fees for over 4,000 mutual funds and a $0.65 fee per options contract
Bonus
Investment vehicles
Robo-advisor: Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™ IRA: Charles Schwab Traditional, Roth, Rollover, Inherited and Custodial IRAs; plus, a Personal Choice Retirement Account® (PCRA) Brokerage and trading: Schwab One® Brokerage Account, Brokerage Account + Specialized Platforms and Support for Trading, Schwab Global Account™ and Schwab Organization Account
Investment options
Stocks, bonds, mutual funds, CDs and ETFs
Educational resources
Extensive retirement planning tools
Terms apply.
7. Invest in stocks
If you don’t mind parting with your $1,000 for a while for a chance of higher returns (at higher risk), consider investing in the stock market.
Chavis suggests going with stock index funds. These investment funds follow a benchmark index, such as the Nasdaq 100 or the S&P 500. The money you put in such a fund is then invested in all the companies that make up the index, which allows for a more diverse portfolio than you’d get buying individual stocks.
“This is a great option for those with a long-time horizon,” Chavis says. “You will get good stock market diversification, low costs and likely no trade fees.”
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No minimum required to open an account or to start investing
Fees
Fees may vary depending on the investment vehicle selected. Commission-free trading; regulatory transaction fees and trading activity fees may apply
Bonus
Robinhood will add 1 share of free stock to your brokerage account when you link your bank account and fulfill the conditions in your promotion (you’ll be able to keep the stock or sell it after 2 trading days)
Investment vehicles
Investment options
Stocks, ETFs, options trading, fractional shares, IPOs, plus certain cryptocurrencies through Robinhood Crypto (depending on where you live)
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No minimum required to open an account or to start investing
Fees
Fees may vary depending on the investment vehicle selected. Commission-free trading; regulatory transaction fees and trading activity fees may apply
Bonus
Get 5 free stocks when you open and fund a new account: Sign up with Webull to get your 2 free stocks, each valued up to $300, and deposit any amount to receive 3 free stocks, each valued up to $3,000
Stocks, ETFs, options trading, fractional shares, IPOs, ADRs, plus certain cryptocurrencies through Webull Crypto
Educational resources
Terms apply.
8. Use a robo-advisor
If you’re interested in investing but want a more hands-off approach, you can use a robo-advisor which will automatically invest in several index funds and ETFs based on your goals and risk tolerance. These accounts typically have low or no minimum opening deposits and have much more affordable management advisory fees than traditional financial advisors. CNBC Select suggests Betterment and Wealthfront as our top picks for the best robo-advisors.
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. For example, Betterment doesn’t require clients to maintain a minimum investment account balance, but there is a ACH deposit minimum of $10. Premium Investing requires a $100,000 minimum balance.
Fees
Fees may vary depending on the investment vehicle selected. For Betterment Digital Investing, 0.25% of your fund balance as an annual account fee; Premium Investing has a 0.40% annual fee
Bonus
Up to $5,000 managed free for a year with a qualifying deposit within 45 days of signup. Valid only for new individual investment accounts with Betterment LLC
Investment vehicles
Investment options
Stocks, bonds, ETFs and cash
Educational resources
Betterment offers retirement and other education materials
Terms apply. Does not apply to crypto asset portfolios.
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. $500 minimum deposit for investment accounts
Fees
Fees may vary depending on the investment vehicle selected. Zero account, transfer, trading or commission fees (fund ratios may apply). Wealthfront annual management advisory fee is 0.25% of your account balance
Bonus
Investment vehicles
Investment options
Stocks, bonds, ETFs and cash. Additional asset classes to your portfolio include real estate, natural resources and dividend stocks
Educational resources
Offers free financial planning for college planning, retirement and homebuying
Terms apply.
Compare investing resources
Bottom line
You don’t need to wait to have thousands of dollars to start investing. Even just $1,000 can go a long way if you make it benefit your financial well-being. Whether you’re at the very beginning of your financial journey, paying off debt and adding to your emergency fund or you’re ready to start investing in stocks, even a small initial contribution can help you lay the foundation for a prosperous future.
NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.
Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.
“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”
Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.
Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.
Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.
Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.
In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.
The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.
And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
