My wife and I are planning on taking a sabbatical year off in 2016. We are following a path of 6 years of working very hard, 1 year rest and reflection, repeat. I realize this is not suited to all, and some will think it crazy, but that is that.

This being said, we will have a lump of cash (around $10K) at the end of this year (2014) that we'd like to explore growing in 2015 before we take our year off — otherwise, it will just sit in a low interest savings account.

I'm interested in ideas for short term investment (~1 year) that would make sense in a situation where we have a low appetite for risk (since this money will go into the fund for our sabbatical, and we will need it) and be somewhat accessible (i.e. I will want to access it at the end of 2015 without worry that it will be tied up in something like real estate, where its value may require me to wait come December next year.)

Any ideas? What kinds of investments are suitable for this kind of time frame and purpose?

  • 2
    Welcome to Money.SE. Mind adding what country you are in? Aug 13, 2014 at 23:53
  • Howdy - I'm in the United States. Aug 14, 2014 at 12:45
  • By the way, if as you say you plan on repeating this "6 years on, 1 year off" cycle, now is the time to start planning/investing for the next sabbattical. With a longer time horizon you might have more breathing space to invest in slightly higher-returning areas (e.g., bonds).
    – BrenBarn
    Aug 15, 2014 at 3:56
  • Indeed! I would welcome any ideas for that time horizon as well. Aug 15, 2014 at 13:05

2 Answers 2


I'm not an expert by any means, but pretty much every source I've seen says that one year is far too short for any sort of real "investment". Most guides suggest that anything less than 3-5 years should stay in no-risk accounts like savings or CDs. If you need to be sure you get all of the money back after just one year, any sort of market-based investment (e.g., stocks or bonds) is too risky.

One option is to buy I-bonds. You can buy up to $10,000 worth in a calendar year, and 12 months is the minimum holding period. The advantage of I bonds is that the interest rate is indexed to inflation, so that (roughly speaking) they cannot lose value in real dollars. Right now they pay 1.94% per year, which is substantially better than you're likely to get with a savings account or 12-month CD. This would come to $194 if you buy $10k of I Bonds.

If you sell before holding them for five years (which you will under your plan) you forfeit the last 3 months' worth of interest. Even so, your effective rate will likely be better than a savings account or CD. (Also you could get 12 months' worth of interest if you're able to buy them slightly early and/or postpone your sabbatical slightly so that you hold them for 15 months.)

Your other option is to find the best rate you can in a CD or savings account. Nerdwallet for instance suggests you could get between 1% and 1.1% for a $10k deposit in a 1-year CD, which would be about $100.

As you can see, either way your money is not going to grow that much. You'll be gaining somewhere in the ballpark of a couple hundred dollars at most. There just isn't a way to earn more than that in one year without some risk of losing principal.

(I'm assuming based on your Texas flag pic that you live in the USA. :-) To buy I Bonds you must be a US citizen, resident, or government employee.)

  • "One year too short" is right on target. Aug 14, 2014 at 0:49
  • Thanks for your answer. I-bonds sounds very interesting. I am going to talk to my landlord and see if he can swing me a deal to save me more than $200 if I pay him up front for rent; if not, I will likely go with one of these conservative options (I-bonds/CD/savings etc.). Aug 14, 2014 at 12:50
  • ouch, i just noticed that the maximum you can buy is only $10,000 per calendar year... that can't be right, can it? (source: treasurydirect.gov/indiv/products/prod_ibonds_glance.htm)
    – user12515
    Feb 26, 2021 at 17:36

Short time horizon, small pot of money, and low appetite for risk? That smells like low return situation to me.

I guess it depends on how low your appetite for risk is, though. You could open a brokerage account (free) and purchase $10K worth of a fully diversified ETF like VTI, optionally putting maybe 20% of it in a diversified bond ETF. I consider that a reasonably conservative investment, but if you are of the mindset that you cannot tolerate a drop in your wealth, it's not going to work. Plus if you don't have any other investments, this will be the thing that requires you to report capital gains to the IRS, and that paperwork is never fun.

As an alternative, you have CD's, which will make you very little. Or a high-ish interest rate electronic savings account like Capital one 360 or Emigrant Direct (there are probably newer ones now that outcompete even these). Still, with anything in this paragraph you will be lucky to beat inflation. The real interest rate was negative last time I checked, so every risk-free investment will lose money in purchasing power terms. To beat inflation you will need to take on nonnegligible risk.

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