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What should I do with the $7,000 in my checking account to help it grow for me instead of it accruing no interest?

I am 26 years old and only recently entered the working world. I have around $7,000 in my checking account that I would like to use to start saving for a down payment on a house or other non-retirement goals. At the moment my only investment is my employer-sponsored 401(k), to which I currently commit 15 percent of my annual income. What should I do with the $7,000 to help it grow for me instead of sitting in a bank (essentially accruing no interest)?

Banking, Retirement, Investing, 401(k), Real Estate
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June 2018

If you have the goal of buying a place in the next couple of years you should consider holding it in cash to build up enough for a downpayment. The market is too unpredictable in the short-term and it's hard to say whether you'd have more or less when it came time for your downpayment. If it's farther down the road then you could consider investing it. 

For higher interest rates, check out high-yield savings accounts at Marcus, Ally bank, Synchrony, or some of the other online banks. They offer much higher rates than traditional brick and mortar banks while still being FDIC insured. If you're going to be holding cash for a period of time, might as well earn the highest interest rates possible without exposing yourself to market risk. 

As I mentioned, if you have a longer time horizon than 2-3 years, you can then consider investing the funds. 

Best,

June 2018
June 2018
June 2018
June 2018