subject: Where to Put Money When Interest Rates Are Down? [print this page] Where to Put Money When Interest Rates Are Down?
Despite low interest rates in bank accounts across the board these days, there is definitely some hope on the contemporary financial horizon when it comes to more appropriate and beneficial places to put one's money to obtain better rates.
Individual Stocks
When interest rates on savings and typical bank investment vehicles are low, the good news is that the rates on mortgages, car loans, business loans, credit cars and personal loans are also low. But this is for borrowing not making money. That's why one of the best ways to earn substantially more interest with one's money is to invest wisely in individual stocks.
The average annual rate of return on individual stocks across the board for the last six decades has been 11.7% in good times in bad. Certainly in weaker economic times, stocks won't earn as much as in strong times, but they unquestionably outperform savings and cheque accounts, and should be seriously considered to make more profit over the short and long term.
Mutual Funds
Mutual funds are a superb investment to earn greatly increased interest rates in UK markets and markets around the world. These aggregates of individual stocks and bonds are professionally managed and superbly diversified in a wide array of different and highly profitable sectors including technology, pharmaceutical, engineering, manufacturing, and automotive industries. They're not as financially risky as stocks but their returns can even outperform them if an individual gets in with the right domestic or international mutual fund.
Real Estate
If an individual has substantial disposable income or stagnant savings, he can profitably invest in the lucrative real estate market. This can include making tremendous financial gains each year by either buying properties in need of fix up and flipping them for quick profit, or leasing them out to tenants and having them pay the mortgages, taxes and property insurance costs. Annual financial gains can easily soar above the 30% mark for the smart real estate investor.
Small Business
Opening or investing in a small business can earn substantive profits on a year-to-year basis. No matter what type of business it is, if it's managed and advertised intelligently, it can throw off excellent annual returns for its initial investors, far outdoing low bank savings and cheque account rates.
CDs and Money Market Accounts, Etc.
These can definitely earn more than standard savings and bank accounts, although not significantly more. However, with a lot of money invested into them, the extra interest can definitely add up in the long run. Similarly with a cashISA, while these savings accounts don't yield very much more current accounts, the return is still a little higher.
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