Best Investments for Beginners in 2024 (2024)

Investing your money in the stock market can result in an excellent return, which is why so many people choose this route to reach their long-term financial goals. But investing can seem scary and intimidating, especially to first-time investors. Luckily, there are several options considered the best investments for beginners that suit a range of goals, budgets, and comfort levels. This guide will cover the most common options, but a financial advisor can help you identify your best options and provide support while you navigate your first investments.

Best online trading platform for Beginners

Best Investments for Beginners in 2024 (1)

Best Investments for Beginners in 2024 (2)

J.P. Morgan Self Directed Investing

Best online trading platform for Beginners

J.P. Morgan Self Directed Investing

Online trading fees

$0 stock & ETF trades.

$0.65/contract options trades.

$0 mutual funds trades.

Account minimum

$0

Promotion

Get up to $700 when you open & fund an account with qualifying new money. Offer expires 7/19/24.

INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

Best investments to get started

Just getting started with investing and wondering how to earn money on your savings? Here are a few ways to get started.

1. High-yield savings account (HYSA)

If you want higher returns on your money but are nervous about investing, consider opening a high-yield savings account. An HYSA offers a much higher APY than a traditional savings account, which allows you to maximize your return on your money without the risk of investing it.

While you are shopping around to find the best HYSA, keep in mind that other factors should be considered in addition to the APY offered. Read the terms of each HYSA you’re considering carefully, looking for information about minimum balances or annual fees to help you find the best option for you.

Best Investments for Beginners in 2024 (3)

Best Investments for Beginners in 2024 (4)

Western Alliance Bank High-Yield Savings Premier

Western Alliance Bank High-Yield Savings Premier

APY*

5.36%

Min. deposit

$500

Min. balance to earn APY

$0.01

Monthly fee

$0

2. 401(k)

Many U.S. employers offer a 401(k) retirement plan as part of their benefits package. With a 401(k), you will have a certain percentage of your pay held back as a contribution—it can be pre-tax or post-tax, depending on the type of account. A traditional 401(k) contribution is pre-tax, which will decrease your taxable income but means you’ll pay taxes when withdrawing funds at retirement. Contributions for a Roth 401(k) are taxed upfront, which means you won’t owe taxes on your money when you reach retirement age.

Your employer may offer a matching contribution up to a certain percentage of your salary—for example, if you make $50,000 and your employer offers a 100 percent match for the first 6 percent you contribute, your employer will contribute $3,000 per year, provided you also contribute at least that amount. The maximum employee contribution amount for the 2023 tax year is $22,500.

If you are self-employed or your employer doesn’t offer a 401(k), look into the following options:

  • Traditional or Roth IRA
  • SEP IRA
  • Simple IRA or Simple 401(k)
  • Solo 401(k)

Best Investments for Beginners in 2024 (5)

Best Investments for Beginners in 2024 (6)

Robinhood IRA

Robinhood IRA

Fees

  • $0 management fees
  • $0 commission fees
  • IRA Match Early Withdrawal Fee may apply

3. Short-term certificates of deposit (CD)

A certificate of deposit is a type of savings account that offers a higher APY than a traditional savings account. With a CD, you deposit a lump sum of cash for an agreed-upon time frame. During the account term, you cannot access the funds without paying a penalty. Once the CD reaches maturity, you can withdraw or deposit the funds into a new one.

The best CD rates usually offer APYs starting from 5.30%. CD terms range between 6 months and 5 years. Longer-term CDs usually have a higher APY. But you can find some short-term no penalty CDs like CIT's 11-month no penalty CD. CDs from federally insured banks are covered up to $250,000 per customer.

Best Investments for Beginners in 2024 (7)

Best Investments for Beginners in 2024 (8)

CIT Bank CD No Penalty

CIT Bank CD No Penalty

APY*

3.50%

Min. deposit

$1,000

Term

11 months

4. Money market accounts (MMA)

Another low-risk option is a money market account - another type of savings account with a higher APY than a traditional one. The best money market accounts have additional benefits, such as a debit card or check-writing capabilities, which means you can access the money when needed. U.S. Bank offers a competitive money market account option that allows for easy access to your funds through a debit card or check-writing capabilities, while also earning a higher Annual Percentage Yield (APY) than a traditional savings account for low-risk saving.

Best Investments for Beginners in 2024 (9)

Best Investments for Beginners in 2024 (10)

U.S. Bank Elite Money Market Account

U.S. Bank Elite Money Market Account

APY*

4.25%

Min. deposit

$100

Min. balance to earn APY

$25,000

Got a plan for that annual bonus? Open an Elite Money Market Account online in minutes and start saving today. Benefits include:

  • New account clients with balances of $25,000+ earn the advertised 4.25% APY rate for the U.S. Bank Elite Money Market Account
  • Quick and easy online application and funding.
  • No ATM transaction fees at U.S. Bank ATMs.
  • Set custom alerts for important account activity.
  • Bank when, where and how you want with the U.S. Bank Mobile App.
  • Member FDIC.

5. Mutual funds

Rather than putting your money into individual funds, consider investing in a mutual fund. A mutual fund is a group of investments you buy a share of, and a manager determines where to invest the money. This helps you diversify your investments and avoid putting all your eggs in one basket. When you’re young, you’ll likely have more money in stocks, which are higher risk but have a more considerable long-term earning potential. As you near retirement age, your investment mix will change to mostly bonds, which are lower risk and can help guarantee you’ll have a steady income at retirement. Choosing a target-date mutual fund allows you to determine your retirement date so that the fund will focus mainly on stocks when you’re younger and move toward bonds as you creep closer to retirement.

6. Index funds

Index funds are similar to mutual funds. However, rather than a manager determining where to invest the funds, an index fund will invest money within a specific market index. For example, an S&P 500 index fund would purchase stocks within this market index, which includes around 500 of the best-performing index funds in the U.S. Index funds often have a minimum investment requirement. However, some well-known brokerage platforms, such as J.P. Morgan Self Directed Investing*, generally allow you to invest money in an index fund without a minimum (and you can earn up to $700 when an account is opened and funded with a J.P. Morgan Self-Directed Investing).

Best online trading platform for Beginners

Best Investments for Beginners in 2024 (11)

Best Investments for Beginners in 2024 (12)

J.P. Morgan Self Directed Investing

Best online trading platform for Beginners

J.P. Morgan Self Directed Investing

Online trading fees

$0 stock & ETF trades.

$0.65/contract options trades.

$0 mutual funds trades.

Account minimum

$0

Promotion

Get up to $700 when you open & fund an account with qualifying new money. Offer expires 7/19/24.

INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

7. Exchange-traded funds (ETFs)

Exchange-traded funds, or ETFs, are similar to index funds that track a specific market index like the . The difference is that ETFs are bought and sold throughout the day, and investors buy them for a fluctuating share price—just like individual stocks on a stock exchange. ETFs are typically cheaper to purchase and manage than mutual funds; some brokerage firms offer them at $0 commission.

8. Stocks

Investing in individual stocks can be risky—but it can pay off in the long run if you do it right. When you buy stocks, you’re essentially buying an ownership stake in a business. By purchasing stock at the right time (such as when a business is just starting out and shows a lot of potential), you can grow your wealth alongside the company. If you’ve never purchased stock before, it can seem intimidating; however, you can use paper trades to practice investing in stocks. Paper trades allow you to learn how to invest in stocks risk-free since you don’t actually use any money, so by the time you’re ready to invest you’ll be comfortable with the process.

As you’re starting out, you may want to try some of the electronic tools that let you test out the market at a low cost.

Robo-advisors

A robo-advisor is an algorithmically powered advisor that invests money on your behalf based on your goals. This option lets you be hands-off with your investing, making them ideal for first-time investors. Robo-advisors charge a lower commission than a traditional advisor or broker, making them ideal for beginners. For example, M1 Finance automates your wealth in one place that’s accessible via website or app. You will identify your goals and make your own financial decisions, and M1 Finance will automate your strategy to help you reach those goals. M1 doesn’t charge any monthly fees, but it does have a minimum balance fee of $50 and will charge for paper copies of tax documents, statements, and other documents. You’ll also pay regulatory expenses, which are typically just a few pennies when you sell a stock or an ETF.

Best Investments for Beginners in 2024 (13)

Best Investments for Beginners in 2024 (14)

M1 Finance

M1 Finance

Fees

$0

Account minimum

$100

Promotion

Up to $500 when signing up and earn up to $10,000 when transferring your brokerage account to M1 Finance by by November 15, 2023. T&C apply.

Investment apps

Another good option for beginners are investment apps. Using these apps, you can deposit money by scheduling recurring transfers or linking your debit or credit card and rounding up. Here are a few recommendations.

Acorns

Fees

Transactions: $0

Acorns Personal: $3/mo

Acorns Personal Plus: $5/mo

Acorns Premium: $9/mo

Expense ratio: 0.03%-0.25%

Bitcoin: 0.95%

Min. deposit

$5

Bonus

N/A

Acorns allows you to connect your card and automatically round up transactions to the nearest dollar, depositing the change in your account. Once you reach $5, the app acts as a robo-advisor and invests your money in ETFs. It’s a hands-off approach that works well if you’re looking to dip your toes in and try out investing without committing a large sum of money.

Best Investments for Beginners in 2024 (17)

Best Investments for Beginners in 2024 (18)

TradeStation

TradeStation

Fees

$0 stock & ETF trades.

$0.60/contract options trades.

$1.50/contract futures trades.

$14.95 mutual fund trades.

Min. deposit

$0

Bonus

N/A

Tradestation Trading Platform, which is renowned for its comprehensive suite of advanced trading tools, comes at a $0 account minimum requirement, and $0 per trade up to 10,000 shares.

Best Investments for Beginners in 2024 (19)

Best Investments for Beginners in 2024 (20)

Masterworks

Masterworks

Fees

1.5% annual management fee.

20% of any profits.

Min. deposit

$0

Bonus

N/A

For those interested in investing in art, Masterworks provides a well designed and easy to use platform with good investment research on artworks and the contemporary art market at no minimum investment and a 1.5% annual management fee (plus 20% of any profits). Although beginners need to bare in mind that fine art is a high-risk investment compared to other forms of investments, with no recurring income, and a significant waiting period to see any return, there is a potential for high returns, it enables portfolio diversification, in addition to being a tax-advantaged investment.

Brokerage firm

If you don’t like the idea of using an app or a robo-advisor, consider working with a stockbroker through a brokerage firm. While an investment website can only offer limited options, a live broker can help you determine the best places to invest based on your goals. They can also advise you on the best types of investments for you, and then keep track of those investments and advise you about buying or selling stocks. This service comes at a price, though; stockbrokers typically make commission on their clients’ transactions. Ask about a brokerage firm’s profit model and commission percentage before hiring them so you can estimate how much you’ll pay.

Key considerations for beginners

Knowing your options is one thing, but you might still wonder how to start investing your money. Before beginning your investing journey, take the time to consider your short- and long-term financial goals, your risk tolerance, and the amount of money you have to invest.

Determine your goals

What do you want to achieve with your investments? Are you saving for retirement or a significant expense, such as a down payment on a home or a new car? Determining your goals and whether they are short-term or long-term will help point you in the right direction. For example, if you want to maximize your long-term earnings to ensure a comfortable retirement, consider looking into mutual funds or IRAs. But if you have a short-term goal, such as a dream vacation you’re planning in two years, stashing your money in a CD could be a better option.

If you’re unsure of your goals, a financial advisor can help point you in the right direction. Ask friends or family members for recommendations, or use a tool such as WiserAdvisor to find the right financial advisors to help you identify and reach your goals.

Best Investments for Beginners in 2024 (21)

Best Investments for Beginners in 2024 (22)

Find the right financial advisor with WiserAdvisor

Find the right financial advisor with WiserAdvisor

Description

Matching service to connect you with the best financial advisor for your needs.

Benefits

1. Personalized match with up to 3 vetted advisors;
2. Calculators to help financial planning;
3. Free initial consultation;
4. Location-based directory lists of top advisors.

Cost

Free

Consider your risk tolerance

When you first start investing, you might be nervous that you’ll lose a chunk of money if you invest in the wrong stocks. That’s why it’s essential to consider your risk tolerance. Low-risk investments like HYSEs, CDs, or MMAs are good options because they give you a guaranteed return on investment. However, if you stick with these low-risk options, you stand to make much less money over time than if you invested in the stock market. A financial advisor can help guide you toward investments that match your risk tolerance level.

Consider minimum amounts

The minimum investment amount will depend on your choice of investment vehicle. Luckily, you can start investing in stocks with a relatively small amount of money—possibly as little as $10 with some brokerages. Ask about minimum investment amounts as part of your research to ensure the option you choose doesn’t require you to deposit more money than you’re comfortable with.

Diversify your investments

When you invest your money, it’s essential to cast your net wide. Throwing all your money into one company’s stock might seem like a good move, but if that company’s stock prices fall, your investment will quickly lose its value. Investing in index funds, or ETFs, allows you to diversify your investments, which is a much safer bet in the long run.

Picking the right diversification strategy can be tough for beginners, but YieldStreet offers tools and educational content to guide you. Another excellent platform to use if you are retiring and want diversify your assets is Rocket Dollar, or Masterworks if you are interested in investing in fine arts.

Best Investments for Beginners in 2024 (23)

Best Investments for Beginners in 2024 (24)

YieldStreet

YieldStreet

Fees

0% - 2% (varies by investment type)

Min. deposit

$10,000

How to pick the best investment vehicle as a beginner

Deciding on the best investment vehicle can be tricky, even if you think you understand your options. Once you’ve identified your goals and risk tolerance, consider consulting financial advisors to point you in the right direction. They can use their experience and knowledge of the stock market to help you identify the best options for your money.

Make your move

The best investment options will be different for everyone. That’s why it’s important to learn about your options and consider the ones that will help you meet your financial goals. Speaking to a professional can help guide your decision, but you must make the final call based on your comfort level.

Frequently asked questions (FAQs)

You probably have many questions if you’re looking into the best investments for beginners. The following are a few common questions about investing that can help you understand how to make the best financial decisions.

How can I make money without investing in stocks?

If you don’t want to invest your money in the stock market, you have several options to get a return on your money. The lowest-risk options include a high-yield savings account, certificate of deposit, or money market account. You can also look into purchasing real estate as an investment, buying into a franchise, or even investing in precious metals like gold or silver. However, these options require a substantial sum of money before investing, whereas you can open an HYSE, CD, or MMA with a smaller cash deposit.

What are non-financial investment types?

When considering the best place to invest your money, you might come across the term “non-financial assets.” This term refers to an asset, such as land or real estate, that isn’t traded on the stock market. Other examples include investing in natural resources or patents.

What are the best low-risk investments?

The best low-risk investments are not technically investments at all. Putting your money into a high-yield savings account, certificate of deposit, or money market account will get you a better return on your money than a traditional savings account. However, you won’t get as high a return on your investment by stashing your money into one of these options as you would be likely to get by investing it. Speaking to a financial advisor can help you decide which option will get you the most for your money while giving you peace of mind that you won’t lose everything if the market crashes.

*INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

The information presented here is created independently from the TIME editorial staff. To learn more, see our About page.

Best Investments for Beginners in 2024 (2024)

FAQs

What is the safest investment with the highest return? ›

These seven low-risk but potentially high-return investment options can get the job done:
  • Money market funds.
  • Dividend stocks.
  • Bank certificates of deposit.
  • Annuities.
  • Bond funds.
  • High-yield savings accounts.
  • 60/40 mix of stocks and bonds.

What is the best first investment to make? ›

Best investments to get started
  • High-yield savings account (HYSA) ...
  • 401(k) ...
  • Short-term certificates of deposit (CD) ...
  • Money market accounts (MMA) ...
  • Index funds. ...
  • Robo-advisors. ...
  • Investment apps. ...
  • Diversify your investments.

How much money do I need to invest to make $3,000 a month? ›

Imagine you wish to amass $3000 monthly from your investments, amounting to $36,000 annually. If you park your funds in a savings account offering a 2% annual interest rate, you'd need to inject roughly $1.8 million into the account.

Where to invest $50,000 for 3 years? ›

Here are 10 options to help you and your family use $50K to build wealth and financial stability over time.
  • Max out your retirement accounts. ...
  • Contribute to a health savings account (HSA) ...
  • Fund a 529 college savings account. ...
  • Stash it in a high-yield savings account or CD. ...
  • Invest in Treasurys. ...
  • Invest in an index fund.
Apr 11, 2024

Should a 70 year old be in the stock market? ›

If you're 70, you'd look at sticking to 40% stocks. Of course, there's wiggle room with this formula, and it's really just a way to get started. And for many older investors, a 50-50 split of stocks and bonds is what's preferred throughout retirement, and that's fine, too.

What is the best guaranteed investment? ›

Certificates of deposit (CDs)

These are an investment contract you have with a bank to pay you a guaranteed rate of return when you deposit money for a specified amount of time. CDs are among the safest investments out there since there is virtually no risk of loss of principal.

What is the best stock to invest in 2024 for beginners? ›

In addition to Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Mastercard Incorporated (NYSE:MA), Alphabet Inc. (NASDAQ:GOOG) is one of the best investments for beginners in 2024. Click to continue reading and see 5 Best Investments for Beginners in 2024.

What is the number 1 rule investing? ›

Warren Buffett once said, “The first rule of an investment is don't lose [money]. And the second rule of an investment is don't forget the first rule. And that's all the rules there are.”

What is the most common winning investment for new beginners? ›

“To spread the risk out, mutual funds or ETFs might be the best option for a new investor.” Choosing between mutual funds and ETFs isn't always easy, but the former may be more beneficial to starting investors.

How much money do I need to generate $2000 a month? ›

Earning $2,000 in monthly passive income sounds unbelievable but is achievable through dividend investing. However, the investment amount required to produce the desired income is considerable. To make $2,000 in dividend income, the investment amount and rate of return must be $400,000 and 6%, respectively.

How much money a month to make $100,000? ›

$100,000 a year is how much a month? If you make $100,000 a year, your monthly salary would be $8,333.87.

How to make $5000 a month in dividends? ›

To generate $5,000 per month in dividends, you would need a portfolio value of approximately $1 million invested in stocks with an average dividend yield of 5%. For example, Johnson & Johnson stock currently yields 2.7% annually. $1 million invested would generate about $27,000 per year or $2,250 per month.

What can I double my money in 7 years? ›

For example, if your investment earns 6% per year on average, you would take 72 divided by 6 to determine that it will take 12 years for your money to double. Based on the above, you would need to earn 10% per year to double your money in a little over seven years.

How to get double money in 5 years? ›

Effective Ways to Double Your Money
  1. Mutual Funds: There are various types of mutual funds. ...
  2. Kisan Vikas Patra (KVP): It comes under the Post Office Small Saving Scheme. ...
  3. Corporate Bonds: Bank deposits don't offer a high rate of interest.

How to get 10% return on investment? ›

Investments That Can Potentially Return 10% or More
  1. Stocks.
  2. Real Estate.
  3. Private Credit.
  4. Junk Bonds.
  5. Index Funds.
  6. Buying a Business.
  7. High-End Art or Other Collectables.
Sep 17, 2023

Which investment has high return and low-risk? ›

Returns from low-risk investments, like government bonds, tend to be modest. Some low-risk choices, like CDs or high-yield savings accounts, can be reliable ways to generate a better return than you'll find in a traditional savings account.

Where is the safest place to put your retirement money? ›

The safest place to put your retirement funds is in low-risk investments and savings options with guaranteed growth. Low-risk investments and savings options include fixed annuities, savings accounts, CDs, treasury securities, and money market accounts. Of these, fixed annuities usually provide the best interest rates.

What is the safest investment for 100000? ›

Government bonds (aka "Treasurys") are generally considered the safest investments because they're backed by the full faith and credit of the U.S. government. Other types of bonds include corporate bonds and municipal bonds (earnings on the latter are exempt from federal taxes).

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