5K to invest?

I have 5000 dollars taht i want to put in such as a savings account. Im 21 years old. I heard CDs are good but there is penalty for withdrawing early. Some people say just put it on savings accounts but savings account opened at banks have very low interest which is basically nothing. I have another bank that i have 1K in but the interest they pay is 0.25 percent.

I see things online like INGDirect where it pays 4.2 percent on your money. However, they have 2 rates. One that is APY and the other is the regular rate on bankrate.com? I am also not sure how it works.

If i put in 5K at ing direct and say I want to take all my 5K out after 6 months, do i make 5000 X 0.042 X 6/12= 105 dollars?

Of course after taxes I would probably make only 70 or so? Do i have to pay taxes on this? I do not have a job so basically that is my income. I heard you had to make a certain amount to be taxed.

So if i only make 105 dollars for the year, do i still have to pay tax on this?

Any other recommendatoins would be great. Thanks.

5K to invest?fast loan

Man, I%26#039;m sorry to tell you this, but you really don%26#039;t know how to earn money....

If I invest 5K and take all my 5K out after 6 months, I make minimum 250 dollars (5000 X 0.10 X 6/12= 250 dollars at 10% APY).

5K to invest?

loan

If you are sure you can do it after 6 months, they have 90 day and 120 day CD%26#039;s.

If you can leave some of it in as a real investment, consider looking into mutual funds.

The tax you pay is related to your income and total capital gains you make in a year and how you file your income tax. If the $105 was all you had for capital gains for the year, I don%26#039;t think you%26#039;d have to report the earnings, the 1040 EZ or 1040A forms at IRS.Gov will have the specific amounts.

Hope that helps.|||There is an online bank that pays higher rate than ING. It is EmigrantDirect.com. They are FDIC insured, so there is no risk of losing your money.

The current APY (annual percentage yield) is 4.75%, and you do not have to keep a minimum balance. So if you invest $5K for a year you will get 5000*0.0475=$237.50 in interest, on which you will have to pay taxes depending on your tax bracket.

Your calculation of interest is pretty close. Your interest is calculated based on APR (not APY) and days rather than months though. So you will get around $102 if you keep the money at that rate for 6 months. If that is all you make next year, I do not believe you will have to pay taxes on that because your income will be too low, but you might want to check with someone else on that.

The way online savings accounts work is really simple, and it is the same for ING Direct and EmigrantDirect. You can open your account online (it does not take much time) and link it to your checking account at your bank. Then you transfer the money from your checking account to your online account and it starts earning interest. You can withdraw money from your online account by transferring it back to your checking up to three times a month. But unlike CDs, there is no penalty for doing it. So you will be able to use some of the money while the rest of it pays nice interest. I recommend that you read the FAQs on both websites to familiarize yourself with the idea and to make sure that this is what you need.

I%26#039;ve had accounts with both ING and EmigrantDirect for more than two years and never had a problem. Hope this helps.|||CDs are nit so good. I%26#039;m not a financial guru, but I am getting 40%-50% annual interest.

You may e-mail me for advice. I will need more information about your situation, plans and needs.

You have to be careful if you do not want to be scamed and lose your money.

4.2 percent on your money is too low. You can find much better opportunities.