In Personal Finance, what we learn and do is trying to park our cash to a better place. Our job is parking our cash into a place where the cash can grow. There are a lot of places for us to park our cash. So what we will consider is how fast it can grow, what is the risk and how long it takes to grow your cash to a certain level.

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Jennie L. Phipps from Bankrate.com wrote an article that shared with us some of the great place for us to park our cash. So I listed down 5 that Jennie suggested below:

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1. Bank Certificates of Deposit / CDs Banks

You purchase a CD for a fixed amount of money for a fixed period of time - one month, three months, six months, a year, five years, etc. CDs Banks will lend out the money at a higher rates and at the end of the day offering a very attractive savings rate.

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2. Online Bank Savings Accounts

Some online banks offer the equivalent of a business sweep account to nonbusiness-owning investors. These accounts allow you to move money from your checking account at your regular brick-and-mortar bank into their interest-paying savings accounts. When you need to spend it, you can transfer the money back (the online banks generally don’t offer checking), with no expense and very little hassle. Some of the hot online bank is Emigrant Direct, HSBCDirec.com, IngDirect.com and Capital One and etc.

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3. Bank or investment company money market funds

Your neighborhood bank or the investment company where you stash your IRA is likely to offer a money market account or money market mutual fund. The neighborhood bank’s yields might not be quite as high as those of online banks, but rates are going up. Mutual funds sold by Fidelity, Vanguard, USAA and TIAA-CREF as being particularly low-cost

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4. Ultrashort bond funds

Ultrashort bond funds are administered by many investment management companies. Bond funds offer a little more yield than money funds at a slightly increased risk. Ultrashort bond mutual funds invest primarily in U.S. Treasury notes, corporate bonds and mortgage-backed securities. Because these bonds mature in no more than six months, the investments turn over quickly, and bad luck generally doesn’t hang around.

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5. Exchange-traded funds, or ETFs

With short-duration fixed-income holdings are a less attractive alternative. Only a few fixed-income ETFs exist at this point in time, and most focus on Treasury securities. They are available through iShare funds sold by Barclays Global Investors, which also offers two bond ETFs with broader holdings. They are only slightly riskier than U.S. Treasury bonds and potentially more lucrative.

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Source : Bankrate.com

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