Finances FYI Presented by JPMorgan Chase
Late summer has a way of forcing you to evaluate your finances.
Vacation spending is behind you, holiday bills are far enough away to plan for, and the end of the year is suddenly visible. It’s also a good time to ask whether idle cash could be working harder for you.
That doesn’t mean you need to start chasing hot stocks or making big, risky moves. Low- to moderate-risk products like certificates of deposit, bonds, money market accounts, and micro-investing apps can offer you a middle ground between leaving money untouched and taking on more volatility than you can handle.
CDs Put Time to Work
A certificate of deposit, or CD, is one of the simplest tools for short-term savings.
You’ll deposit a fixed amount for a set period, like three, six, or 12 months, and the bank or credit union will pay a stated interest rate on it. In exchange, you’ll agree not to touch the money until the term ends.
This setup makes CDs a good fit for money you know you’ll need later but want to put to use now. Someone saving for winter insurance premiums, holiday travel, or a January tuition bill may want to set up a CD toward the end of the summer.
However, withdrawing funds early can trigger a penalty, so you shouldn’t put your entire emergency fund into a CD. They work best when paired with a regular savings account.
Cash That Stays Flexible
For people who want to see better returns without locking money away, a money market account may be more comfortable.
These accounts often pay more than traditional savings accounts while still allowing access through transfers, debit cards, or limited check writing. They’re useful for “near-term but not today” savings, such as a small home repair, back-to-school costs, or a year-end tax bill.
Before you open a money market account, check the minimum balance, monthly fees, and withdrawal rules. A good rate can lose its shine quickly if the account charges fees when your balance dips.
Bonds Bring Balance
Bonds might be a less flashy investment than stocks, but they still deserve a closer look.
When you buy a bond, you’re lending money to an issuer, such as the federal government, a city, or a company, that agrees to pay interest and return the original amount when the bond matures, assuming it can meet its obligations.
For cautious investors, U.S. Treasury securities are often the easiest bond category to understand because they are backed by the federal government.
Other bonds may pay more, but the extra return usually comes with more questions: Who is borrowing the money? How strong are their finances? What happens if interest rates move?
Bond funds can make it easier to spread money across many bonds, though their share prices can still rise and fall.
For someone investing beyond the end of the year, bonds may help balance a portfolio that’s otherwise too dependent on stocks. For money you’ll need soon, direct savings products are usually easier to manage.
Small Investments, Big Habits
Micro-investing apps are not the same as savings accounts.
They usually put money into portfolios that may include stocks and bonds, which means balances can move up or down. Their value is behavioral — they make investing feel less intimidating by allowing small, automatic contributions.
Rounding up purchases, investing $5 at a time, or setting a weekly transfer can help people start before they feel “ready.” Waiting for a perfect lump sum often turns into waiting forever.
Reset Before the Year Ends
Low- to moderate-risk money moves will not turn a few hundred dollars into a fortune by New Year’s Eve. That’s not the point.
The goal is to give each dollar a job: some for emergencies, some for known expenses, some for steady growth, and some for longer-term investing.
As summer winds down, the calendar offers a natural reset. A small CD, a cleaner savings setup, a first bond purchase, or an automatic investing habit can all make the final months of the year feel less reactive.
Finances FYI is presented by JPMorgan Chase. JPMorgan Chase is making a $30 billion commitment over the next five years to address some of the largest drivers of the racial wealth divide.
