Easy Ways to Invest while in College
The majority of college graduates start their first months in the job market with low amounts of cash, no savings, and credit card debt (and this doesn’t even include school loans). This is a growing, widespread problem for freshly graduated college students. It is especially difficult during economic slowdowns when recent graduates finding a job is difficult.
Four Investment Ideas for College Students
1. Free Checking Account 0%
Let’s start with the checking account. Checking accounts are the most flexible type of account available. You can deposit and withdraw funds whenever you want. Almost every student has a checking account, and those who don’t should open one. Most people pay a small monthly fee for their checking accounts while receiving no interest on their money. If you are trying to save money, it makes sense to have a free checking account. There are many banks, like WaMu, that offer free checking accounts with free checks.
2. Savings account 0.1% — 0.3%
Another great option for students looking for flexibility in their investments is opening a savings account. Basic savings accounts don’t require a large initial investment. In fact, they work similar to checking accounts, but there are some limitations on how many times you can withdraw your money per month. Savings accounts usually don’t come with checks or debit cards, but you can link it with your checking account to make money deposits much easier.
3. Short-term CD – up to 3% APY
Savings accounts are good when you are talking about a couple hundred dollars, but if you have larger amounts, like a $1000 or more, for savings, you probably want to put it somewhere safe where you won’t be able to spend it. You should consider a short term Certificate of Deposit account. With a CD, you can lock your investment for as long as you want. The time of the investment can vary from 1-120 months. Interest rates also differ on CD accounts.
4. Money Market Accounts 1% - 6% APY
A Money Market Account, in my opinion, is the least popular form of investment for college students. This type of account works just like savings, but it requires a larger initial investment, which may be difficult or impossible for most college students to manage.
