Whether you are a beginner looking for a place to start, or a veteran looking to try new things, $1000 can be a great amount for an initial investment. It’s a value big enough to yield returns in real numbers — as well as just earning decimal increments
— and yet it’s small enough that losing a portion of that amount likely won’t ruin you. Here are some of the best ways you can invest $1000 in 2021.
1 - High yield savings account
One of the trends this year is the rise in popularity of
high yield savings accounts, with plenty of companies offering interesting takes on the concept. It’s easy to see why this type of savings account has piqued the interest of consumers. After all, many appreciate the straightforward nature of a regular savings
account, and it used to be a popular investment option before the ROI on regular savings accounts became so low that it was barely beating inflation. High yield savings accounts solve that problem by — as the name suggests — offering a higher yield.
In the US, the average interest rate for savings accounts is around 0.06%. That’s an average — if you shop around you might get a rate as high as 0.5%. However, a high yield savings account can offer much more, with some companies offering a return as high
as 5% per year. Definitely worth a look, if you are in the market for a straightforward investment option.
2 - Invest in retirement
You can use $1000 as the starting seed for your retirement fund. Depending on your employment situation and on whether or not your employer offers you retirement benefits, you can invest that money into a 403(b), a 401(k), or an individual retirement account
(IRA). Either way, making that initial investment will get you familiar with how these retirement accounts work, which will make it much easier for you to keep investing in them, moving forward.
3 - Become a money lender
This is another market that has become more convenient over the years. P2P lending can be riskier than other types of investment, but when done right it can lead to a good return on investment. On top of that, you also get the satisfaction of lending money
to a real person. Most P2P lending platforms allow you to get a glimpse of who will get the money and what they will use it for.
It’s not charity. They still have to pay you back. But still, this type of lending does allow you to play a small part in helping other people achieve their financial goals.
4 - Trust AI
Robot investment advisors work exactly as you’d imagine. You deposit money on their platform, tell the AI what your goals are, and they’ll take it from there, managing a low-cost investment portfolio entirely on their own. It can be tricky to figure out
how to make the most out of these robot advisors, and $1000 is just the perfect amount to use when giving this investment option a try.