5 Smart Money Moves to Make With $5,000 Right Now

5 Smart Money Moves to Make With $5,000 Right Now

Having extra cash is always a luxury, especially now as inflation remains stubbornly high. But knowing what to do with that money creates its own challenges.

1. Invest in the stock market

• Historical return: The S&P 500's annual rate of return is just over 10%, a great way to build long-term wealth.
• When to do it: Invest extra money you can afford to leave in the market for several years.

2. Open a savings account

• High-yield: Many accounts pay 5.00% interest or higher, a safe place to earn extra money.
• When to do it: Ideal for emergency funds or saving up for significant expenses.

3. Open a certificate of deposit (CD)

• Term length: Find a CD that pays a high rate and suits your comfort level.
• Guaranteed return: Benefit from the fixed yield rate over the CD term length.

4. Pay off credit card debt

• Benefit: Paying off debt can eliminate high-interest payments and improve your financial situation.
• Interest savings: Putting $5,000 towards debt can save you from excessive interest payments.

5. Open a money market account

• Blend of accounts: Get the benefits of savings and checking while earning a high annual percentage yield (APY).
• Access: Have easy access to your funds while earning interest.