I'm 21, I want to invest about 600 dollars a month into some sort of interest account. Should I go with online savings account, CD, or I've read about DRIP accounts? Which would you say is the best route to go? Thanks.
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First you need to figure out how much "emergency fund" you require. You should consider your income level and spending requirements. In general your emergency fund should cover about six months of spending requirements, but your circumstances may vary. For example if you are living away from home but you could go back to living with your parents, that would give you reason to lower your emergency fund requirement.
Contribute $600 per month to a liquid investment such as a savings account until you have built up your emergency fund. After that, you can start building some medium term savings such as CDs. For example every 3 months you could open a CD for $1800. At first stick to maturities of 2 years or under and space out the maturity dates (google CD ladder). After a while you will see that the maturities of your CDs can replace your emergency fund. In other words, if you need $1800 per month to live on, and you have setup your CDs so that there is $1800 maturing every month, you do not need your emergency fund in savings anymore, the CDs have become your emergency fund.
Finally once that is established, you can start looking at long term investments such as mutual funds, stocks and bonds. You can setup an online brokerage account very easily and for very little money. You could start doing that immediately if you want, but do not let that distract you from building the cash base that I described above.
All of this can be done with online banks. Check out bankrate.com to find the best rates on CDs. But you will probably want a checking account at a local physical bank too, and then you tie that account to your online savings accounts. This just makes it easier to move money around and to deposit your paycheck, etc.
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