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My current bank offers a 3.63% interest rate. I have about $7k in flexible money that I could put in potentially good investments.

Right now, I'm only familiar with Term deposits, the stock market, and savings account interest.

The stock market seems to be a hard option for me as the brokerage amounts to about a minimum of $14-15, and that bites a lot out of a small capital.

There's already a similar question asked here but no answer seems to be posted.

What would you recommend?

  • You should also just simply look into other banks. The top now seems to be around 4%. – curiousdannii Feb 9 '15 at 9:57
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If you want higher returns you may have to take on more risk.

From lowest returns (and usually lower risk) to higher returns (and usually higher risk), Bank savings accounts, term deposits, on-line savings accounts, offset accounts (if you have a mortgage), fixed interest eg. Bonds, property and stock markets.

If you want potentially higher returns then you can go for derivatives like options or CFDs, FX or Futures. These usually have higher risks again but as with any investments some risks can be partly managed.

Also, CMC Markets charges $11 commission up to $10,000 trade. This is actually quite a low fee - based on your $7,000, $22 for in and out of a position would be less than 0.32% (of course you might want to buy into more than one company - so your brokerage would be slightly higher). Still this is way lower than full service brokerage which could be $100 or more in and then again out again.

What ever you decide to do, get yourself educated first.

  • What are CFDs, FXs, and Futures? I haven't heard of them yet. Can you provide links for them? Thanks. – Mark Gabriel Oct 18 '14 at 10:36
  • CFDs are Contracts For Difference, FX is Foreign Exchange (i.e. trading currencies), Futures - also called Futures Contract. You can also look these terms up on Investopedia, with your broker, on search engines or in investment and trading books. Like I said get yourself educated first before putting your money into something you don't understand. – Victor Oct 18 '14 at 11:23

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