Takeaways
- Simulating investment returns can give you clarity on where to invest.
- Financial advisors advocate for selecting a diversified investment portfolio.
- Investments can vary widely in risk and return; know your risk tolerance.
- Beginner investors can focus on stashing cash in savings accounts and CDs.
- Higher-return investments like stocks, real estate, and cryptocurrencies can quickly accelerate portfolio growth.
Investment Calculator
Try our plug-and-play investment calculator to understand what you could earn by investing your money in different investments and saving products.
Calculator
Compound Interest Calculator
This investment calculator is for informational purposes only.
Our Picks For Best CDs:
Member NCUA
Alliant Credit Union CD
Smart Money Rating: 5/5
APY: 5.10 % (Terms Apply)
Required Minimum Balance: $1,000
Member FDIC
Quontic 6 Month CD
Smart Money Rating: 5/5
APY: 5.10%
Required Minimum Balance: $500
Member NCUA
Consumer Credit Union CD
Smart Money Rating: 5/5
APY: 5.00% on 13 month Certificate (Terms Apply)
Required Minimum: $250
How to Use the Investment Calculator
Fill in the variables in the investment calculator to simulate your expected investment return. Here's how each one works:
- Initial Investment: Start with your initial deposit, which is the amount you put towards your investment.
- Monthly Contribution: One of the fastest ways to increase your investment is to add contributions, no matter the size, regularly. Read more about dollar-cost average investing.
- Contribution Frequency: You can theoretically make contributions daily, monthly, or yearly. For example, most people contribute to their 401(k) balances via their monthly paycheck.
- Years of Growth: Investing for the long term means focusing on your investment timeline. For some investments, shorter growth is appropriate. CDs, for example, might only last one to two years, while stock investments can last decades.
- Rate of Return: Your expected rate of return, often referred to as your APY, is the percentage you believe your investment will gain. Check out the Rule of 72.
- Compound Frequency: Your compound frequency depends on your investment. Some investments compound annually, while others, such as quarterly dividend-paying stocks, might be more frequent.
Our Picks: Best Online Brokerage Accounts
Where to Invest in 2025
Choosing the best place to park your cash is one of the most critical decisions. You can increase your net worth by selecting a combination of high-growth and sustainable investments.
Here are seven places you can start investing today:
1. High yield savings accounts at banks and credit unions offer the perfect place to put excess cash for temporary save keeping or to grow your money with interest income. APYs can vary based on the federal funds rate and other factors.
2. Certificates of Deposits are geared toward longer-term savers. With a great CD, you can lock in a fixed interest rate for a couple of months to several years. Read about our picks for the best CDs.
3. High Yield Checking Accounts are hybrids of traditional checking accounts and savings accounts. They could be a good fit if you want the flexibility of a traditional checking account with the potential to earn interest.
4. Public Company Stocks are traded on major stock exchanges, allowing investors to participate in a company’s growth.
5. Corporate Bonds are bonds issued by companies that pay investors coupon payments. There are many different types of bonds, and you can invest in corporate bonds through your online brokerage account.
6. Real Estate investments can come from rental properties, commercial buildings, or publicly traded Real Estate Investment Trusts.
7. Cryptocurrencies like Bitcoin and Ethereum have exploded on the investing scene. Read about How to Invest in Bitcoin.
Plug and Play: Smart Money’s Net Worth Calculator
Why Annual Percentage Yield Matters
The annual percentage yield (APY) you earn on investments tremendously impacts how quickly they grow over time. The higher your APY, the quicker your investments will grow.
Compound interest accelerates that growth, and the number of compounding periods also matter. Investments that compound daily or monthly snowball into significant investments faster than the same investment compounding at an annual rate.
Get a snapshot of current APYs on checking and savings accounts and certificates of deposit (CDs):
Smart Summary
After saving as much of your disposable income as possible, you want to ensure you get the biggest bang for your buck. That’s where financial planning comes into play. Most finance professionals advocate for building base savings in your emergency and slush fund. You can progress up the investment ladder to higher-return investment opportunities from there.
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