11 Best Short-Term Investments With High ROI In 2024 (2024)

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Short-term investments are exactly that- short! You can invest now and not wait forever for a return on your cash.

But what are the best short-term investments and what returns may come your way?

We’ve compiled a list of short-term investment options for everyone, from high-yield savings accounts to short-term bonds.

Whether you want tostart investingto make some extra money quickly or seeking a more secure investment option, we’ve got something for everyone on our list.

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Table of Contents

Quick Picks For Short-Term Investments

You’ve got to research before investing because there are many types of short-term investments. You want to find the best option for you to get the best ROI.

But we get that you’re busy and want some of our top picks so you can get a move on!

Here are a few short-term investments you may want to put on the top of your list if you want secure, lower risk options in your portfolio:

  • Higher Interest Rates On Money: High-Yield Savings Accounts
  • Money-Back In 1 Year: Corporate Bonds
  • Easy Fixed Interest: Certificate Of Deposits

Are Short-Term Investments?

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Short-term investments are a great way to grow your money. They are generally considered to be any investments made for three years or less.

There are many different types of short-term investments, from high-yield savings to money market accounts to short-term bonds. Each has its own set of benefits and risks, so it’s important to choose the right one for your needs.

The best short-term investments will offer you:

  • A higher interest rate than a regular savings account
  • Low fees
  • Easy access to your money

They also tend to be less risky than other types of investments, making them a good option for those who are new to investing or looking for a more secure investment.

11 Best Short-Term Investments

1. High Yield Savings Accounts (HYSA)

Potential Return (ROI): 0.90% at CIT Bank

A high yield savings account is a type of savings account that offers a higher than the average interest rate. HYSAs can be a great way to grow your savings, especially if you have a large amount of money in your savings account.

Online banks typically offer high yield savings accounts, like CIT Bank, but you can invest in a bank or credit union.

The FDIC insures them for banks and National Credit Union Administration for credit unions, which often have lower overhead costs than traditional banks. This allows them to offer higher interest rates to their customers.

Many high yield savings accounts also offer other benefits, such as no fees and no minimum balance requirements. However, it is essential to compare different accounts before deciding which one is right for you.


  • FDIC insurance: unlikely to lose money
  • Higher interest rate than traditional saving accounts
  • Low risk compared to stock funds


  • Low interest compared to any other short-term investment

2. Cash Management Accounts

Potential Return (ROI): 0.25% – 1%

Cash Management Accounts (CMAs) are a good option if you want to earn more interest than what a traditional financial institution offers. They are also an excellent way to access your money quickly, as you can write checks or use an ATM card to withdraw cash.

Robo-advisors generally provide cash management accounts. These brokerage firms often invest your money into safe low-yield money market funds or exchange-traded funds (EFTs).

Plus, some Robo-advisors offerfree stockswhen you sign up and have more to offer than just a cash management account!


  • Earns more interest than with a traditional savings account
  • Can write checks or use an ATM card to withdraw cash like a traditional checking account
  • Less risky because the money is invested in low-yield money market funds


  • May have fees associated with the account

3. Treasury Bonds

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Potential Return (ROI): 2.08%

Treasury bonds (T-Bonds) are among thebest investmentsfor investors looking for stability and security with government bonds. They are issued by the U.S. government and backed by the full faith and credit of the U.S. Federal government.

T-bonds have a fixed interest rate and maturity date. These government bonds are typically issued with maturities between 10 and 30 years.

They offer a low-risk investment with the potential for modest returns. The Treasury bond is highly liquid and can be easily bought and sold in the secondary market.


  • T-bonds pay a fixed rate of interest every six months until maturity


  • Interest rate risk: as the interest rates rise, the value will decline

4. Money Market Accounts

Potential Return (ROI): 0.70%

A money market account is a savings account with a higher interest rate and lower minimum deposits than a regular Certificate of Deposit.

Money market accounts usually have monthly withdrawal limits and require a minimum deposit, though some impose withdrawal restrictions each month.

They are not as liquid as a savings or bank account, which means money market accounts aren’t ideal for quickly moving money around. However, a money market account is much more flexible and liquid than investing money in a CD.


  • Higher interest rates than a traditional savings account
  • There is usually low risk with money market accounts


  • Withdrawals can be restricted
  • Money can’t be moved around quickly

5. Money Market Mutual Funds

Potential Return (ROI): 0.70%

A money market mutual fund invests in highly liquid securities with a low risk of losing money. This type of fund is designed to provide investors with a safe, stable way to earn a return on their investment.

The Securities and Exchange Commission (SEC) regulates these funds. The funds are subject to certain restrictions, such as the types of investments they can make.

Money market mutual funds typically invest money in short-term debt instruments, such as T-bills, municipal and corporate debt, and bank debt securities. They’re considered very safe, as they are backed by the full faith and credit of the issuing government or company.

However, because these funds invest in relatively lower-risk securities, they also provide relatively low returns. For this reason, they are often used as a place to park money that is not needed in the short term and get a little ROI.


  • Can be cashed out quickly
  • Typically have a higher interest rate than savings accounts and C.D.s


  • Not as safe as a typical MMAs backed by the FDIC.

6. Short-Term Corporate Bonds

Potential Return (ROI): 1% – 2%

Short-term corporate bonds are a type of debt security issued by a corporation.

They’re considered one of the riskier investments because the full faith and credit of the U.S. government doesn’t back them.

Short-term corporate bonds typically have a term of one year, but they can also be issued with terms of up to five years and are a good option for investors looking for a higher yield than T-bonds.


  • Higher yield than a Treasury bond
  • Can be issued with terms of up to five years


  • Riskier than Treasury bonds

7. Short-Term Government Bond Funds

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Potential Return (ROI): 1% – 2%

Short-term government bond funds are investments that pool money from investors and invest it into short-term government debt securities, such as Treasury bills (T-bills) and commercial paper.

They are a good option for investors who want to invest their money in safe, stable short-term bond funds. Short-term government bond funds offer a higher yield than a traditional savings account, but they are still at lower risk.


  • Backed by the U.S. government
  • Higher yield than a traditional savings account
  • Little or no risk


  • Lower rate of return

8. Certificates Of Deposit

Potential Return (ROI): 2%

A certificate of deposit, or CD, is a saving account that offers a fixed interest rate for a set period.

C.D.s are often used as short-term investment accounts and typically have a maturity date of between three months and five years. When a CD reaches its maturity date, the investor can choose to cash it in or renew it for an additional term.

C.D.s are a relatively safe investment since the Federal Deposit Insurance Corporation insures them (FDIC) up to $250,000 per account. However, they offer lower rates than other types of investments, such as stock mutual funds.

As a result, C.D.s may be a good choice for investors looking for stability and low risk.


  • The majority of CD accounts are covered by FDIC insurance, making them highly secure
  • Higher interest rate than a traditional saving account
  • Maturity can be quick


  • Low liquidity- money is in the CD until terms are up
  • Sometimes considered low-return, not enough ROI
  • Longer C.D.s will provide more ROI
  • No multiple deposits

9. No-Penalty Certificates Of Deposit

Potential Return (ROI): 0.35% – 0.75%

A no-penalty certificate of deposit is a saving account that allows withdrawals without penalty. This makes it a good option for short-term savings since you can access your money if needed.

However, the trade-off is that no-penalty C.D.s typically have lower interest rates than traditional C.D.s.

A no-penalty CD could be a good option if you’re looking for a short-term investment with relatively little risk.


  • Insured by the FDIC
  • Can end the CD early without penalty


  • No multiple deposits allowed
  • Can’t take partial withdrawals
  • regular C.D.s could have higher return rates

10. Online Savings Accounts

Potential Return (ROI): 0.40% – 1.0%

One investing option that has become increasingly popular in recent years is an online savings account. Online savings accounts offer several advantages over traditional savings accounts, making them attractive for short-term investors.

One major advantage is that online savings accounts, like those offered atChime,typically offer higher interest rates than traditional ones. This means that you can earn more money on your investment.

Online savings accounts are often FDIC-insured, meaning that your money is protected in the event of a bank failure. Finally, many online banks offer features such as mobile check deposits and budgeting tools to help you manage your finances in one place.

Read our Chime Review to find out how you can get 1.00% APY on your savings, open a credit builder account, and more!


  • Quick access to cash
  • Higher interest rates than traditional savings accounts
  • Low transaction costs


  • Higher minimum balance requirements

11. Peer-To-Peer Loans

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Potential Return (ROI): 5.5%

Peer-to-peer loans are made between individuals rather than between a borrower and a financial institution.

Peer-to-peer loans are typically made through online platforms that match borrowers with lenders. These platforms allow borrowers to request loans from multiple lenders, allowing lenders to select which loans they would like to fund.

Because P2P loans are not backed by collateral, they tend to have more interest than traditional loans. However, P2P loans also come with higher risks. Investors may not recoup their initial investment if borrowers default on their loans.


  • Offers higher return than other investments
  • Can choose which borrower to lend to based on the profile
  • Contingency funds are available on some sites in case of loan default


  • Riskier because loans are often unsecured
  • ROI may be lowered if the borrower pays back the loan early
  • To get money back early, you will have to find another P2P lender to take the loan

FAQs: Short-Term Investments

What is the difference between short-term and long-term investments?

Short-term investing is holding assets for one year or less and is less risky, such as a cash management account or high yield savings account.

A long-term investment usually lasts more than one year and has more risks, like some stocks in the stock market, real estate, art investments, and other options.

What investment is best for a year or less?

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Various investment options areavailable for those looking to invest for a year or less.

Some popular options include:

  • Savings accounts are a low-risk option that offers liquidity and flexibility. Money can be withdrawn without penalty, making it a good option for short-term needs. However, the interest rates on savings accounts are relatively low, so the return potential is limited.
  • A certificate of deposit (CD) is a savings account that offers a higher interest rate for a longer-term commitment. C.D.s typically have terms of six months to five years. Early withdrawal may be subject to penalties.

What investments need over a year?

Long-term investments are riskier than short-term investments, offering higher returns but also need more time to get ROI.

If you don’t need money right away and have a higher risk tolerance, there are a few long-term investments you can get in on:

  • Stock market:Investing in the stock market offers the potential for high returns, but it also comes with a higher level of risk. Before investing in the stock market, investors should consider their goals and risk tolerance.
  • Bonds: Bonds are a type of debt investment in which an investor loans money to a government or corporation in exchange for interest payments. Bonds typically have a longer term than CDs, ranging from five to 30 years.
  • Mutual funds:A mutual fund is an investment that pools money from many investors and invests it in various assets, such as stocks, bonds, and cash. Mutual funds offer professional management and diversification, which can help to reduce risk.

What makes for suitable short investments?

Short-term investing is attractive because of the potential for high returns in a relatively short period.

What makes an excellent short investment? What should you look for in a short-term investment? There are several factors to consider.

  • Liquidity
  • Safety/low risk
  • Return potential
  • Flexibility
  • Tax implications
  • Expenses

What investments do better over time?

There is no one-size-fits-all answer to this question, as the best long-term investments for a given individual will depend on their goals, risk tolerance, and other factors.

However, some investments tend to perform better than others over the long term. For example, stocks have historically outperformed bonds and other fixed-income investments.

Final Thoughts

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So whether you’re looking for a way to make some extra cash or grow your savings account, these are the best short-term investment options to become an investor and make money.

If chosen wisely, they can be an excellent stream of passive incomeif you find the option that aligns best with your goals.

Though short-term investments may seem less risky, you need to know that any investments come with risks, whether you pick savings bonds or decide to go for long-term investments in the stock market.

By doing your homework and understanding the different types of short-term investments available, you can make smart choices about where to put your money and increase your chances of seeing a return on your investment.

As someone deeply immersed in the realm of finance and investment, I can confidently affirm that short-term investments represent a crucial aspect of any diversified portfolio. The intricacies of these investments, ranging from high-yield savings accounts to short-term bonds, require a nuanced understanding of various financial instruments and their corresponding risks and rewards.

Let's delve into the concepts and instruments mentioned in the article:

  1. High Yield Savings Accounts (HYSA): These accounts offer a higher interest rate than traditional savings accounts, making them an attractive option for short-term savings goals. They provide FDIC insurance and are relatively low-risk compared to other investments.

  2. Cash Management Accounts: Cash management accounts are designed to provide higher interest rates than traditional financial institutions while offering quick access to funds. They often invest in low-yield money market funds or ETFs.

  3. Treasury Bonds: Treasury bonds, issued by the U.S. government, offer stability and security with fixed interest rates and maturity dates. They are considered low-risk investments, backed by the full faith and credit of the government.

  4. Money Market Accounts: Money market accounts offer higher interest rates than regular savings accounts and are insured by the FDIC. However, they may have withdrawal restrictions and are less liquid.

  5. Money Market Mutual Funds: These funds invest in short-term debt instruments, providing stability and relatively low returns. They are regulated by the SEC and offer liquidity but come with some risks.

  6. Short-Term Corporate Bonds: Short-term corporate bonds offer higher yields than Treasury bonds but come with higher risks since they are not backed by the government. They are suitable for investors seeking higher returns in the short term.

  7. Short-Term Government Bond Funds: These funds invest in short-term government debt securities, providing stability and higher yields than savings accounts. They are backed by the U.S. government, offering lower risk compared to corporate bonds.

  8. Certificates Of Deposit (CDs): CDs offer fixed interest rates for a set period, providing security and FDIC insurance. They are less liquid but offer higher returns than savings accounts.

  9. No-Penalty Certificates Of Deposit: These CDs allow withdrawals without penalties, offering flexibility for short-term savings goals. However, they may have lower interest rates compared to traditional CDs.

  10. Online Savings Accounts: Online savings accounts offer higher interest rates than traditional accounts and are FDIC-insured. They provide quick access to cash and low transaction costs.

  11. Peer-To-Peer Loans: Peer-to-peer loans involve lending money to individuals through online platforms. They offer higher returns but come with higher risks due to the possibility of borrower default.

Understanding the nuances of these short-term investment options is essential for investors to make informed decisions aligned with their financial goals and risk tolerance. Whether seeking stability, higher returns, or liquidity, there are various avenues available for short-term investing, each with its unique features and considerations.

11 Best Short-Term Investments With High ROI In 2024 (2024)


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