By AMANDA THEISEN, Communications Manager for Sunrise Banks
Think investing is only for the super-rich? Think again. You don’t need millions—or even thousands—to start growing your money. Whether you’re saving for something in the near future or planning for retirement decades from now, there are beginner-friendly ways to dip your toes into investing.
High-Interest Savings Accounts
A non-interest savings account won’t get you far. Many only pay around a 0.05% annual percentage rate year. That’s just 50 cents on $1,000. But some savings accounts offer much better rates.
A high-yield savings account (sometimes called a money market account) pays more interest and still lets you get to your cash when you need it. They’re perfect for emergency funds: safe, accessible, and earning you more than the change you’d find under your couch cushions.
If you don’t need instant access, look at a Certificate of Deposit (CD). With a CD, you agree to leave your money in the account for a set period—anywhere from six months to five years—and in return, you get a higher interest rate. CDs are great for short-to-medium-term goals, like saving for a down payment. Just remember, taking your money out early usually means paying a penalty fee.
401(k) Retirement Accounts
For long-term savings, a 401(k) is a solid option. This is a retirement account your employer offers that automatically invests part of your paycheck before taxes are taken out.
One of the biggest perks to a 401(k) is employer matching. Let’s say you earn $50,000 and your employer matches 100% of your contributions, up to 3% of your salary. That’s an extra $1,500 a year — free money for your future self!
Many 401(k)s offer target date funds, which adjust your investments based on your retirement year. When you’re younger, your account will hold more stocks for growth. As you get closer to retiring, it will shift toward bonds for stability. Just note that like CDs, taking money out before retirement usually comes with penalties.
Index Funds
Want to invest without stressing over individual stocks? Index funds might be your best friend. They track a market index like the S&P (Standards and Poor’s) 500, meaning you’re investing in hundreds of companies at once. That’s built-in diversification without the hassle.
They’re also low cost because they’re passively managed. Instead, they aim to match the market’s performance, which has historically done well over the long haul.
Bottom Line
You don’t need to be a Wall Street pro—or have a massive bank account—to start investing. From safe and steady savings accounts to growth-focused retirement plans and diversified index funds, there’s an option for every comfort level and budget.
If you’re still unsure where to start, Sunrise Banks offers free financial counseling for customers. The most important step is simply to begin. Your future self will thank you.
Sunrise Banks Member FDIC (Savings and CDs FDIC Insured / Non-Deposit Products such as 401(K) Accounts and Index Funds are not FDIC Insured, No Bank Guarantee and May Lose Value).
AMANDA THEISEN is the communications manager for Sunrise Banks.
