What are the Best Short-Term Investments?

What are the Best Short-Term Investments?

Many parents want to help their children start investing, but don’t know where to start. If you need access to your money, long-term investments may not be an option. Short-term investing can create opportunities to put your money to work while still having access to the funds you need. Kids learning how to save and invest can use short-term investments and a kids debit card as low-risk ways to practice money skills.

What are short-term investments?


Short-term investments are invested funds you plan to use within the next few years. Many, like savings accounts, allow you to access your funds anytime. Other investments may provide limited access or a shorter term for tying up your money. Short-term investments are usually low-risk, so you can increase your savings without worrying about market swings.

Why use short-term investing for kids?


If your child is saving up for a big purchase using their kids debit card, they can invest short-term to grow their savings faster and learn the power of investing. As they get older, they can use short-term investments to save for a down payment, a wedding, or starting their own business.

Best investment plan for children


The best investment plan for children depends on your unique financial situation. Consider starting with a savings account that helps you teach investing for kids and build good savings habits. 


High yield savings accounts


The easiest way to invest short-term is by depositing your savings into a bank account that earns interest. The higher the interest rate, the more money you’ll earn. High yield savings accounts are designed to give you the best returns on your money while still having easy access to it, making it a great way to introduce investing for kids. 

Money market accounts


Money market accounts are another type of bank deposit that can help you build the best investment plan for children. They work similarly to a savings account with a few key differences. They typically pay a higher interest rate than regular savings, but can require a higher deposit upfront. 

Government and corporate bonds


Corporate bonds are issued by major companies to fund their investments and are considered a safe way to earn interest regularly. Government bonds are similar to corporate bonds, except the U.S. federal government issues them. Bonds can be bought and sold on the same day and offer a safe investment choice to grow your savings short term.

Certificates of deposit


A certificate of deposit is a time deposit, meaning you agree to put your funds in the bank for a certain amount of time without using the money. While you lose access to your money for a short time, you can earn more money in interest.

Did we miss any short-term investing options for kids? Share your thoughts with us via email, [email protected], or tag @gohenry with #letstalkmoney on Twitter or Facebook.


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Written by Kristin Yarbrough Published Jul 29, 2022 ● 3 min. read