5 best short-term high yield investments in 2024

Investing is a balancing act. You want a long-term return on investment (ROI), but what if you need that money in a year or two? You might need more accessible funds to balance your family budget or reach your goals.

The solution? Short-term high-yield investments that mature in a few months to a few years — not a few decades. If that sounds like the best way to invest money and keep your family on track, we have good news. There are several great short-term high-yield investments that can help you reach your financial goals.

What are short-term high-yield investments, and how do they work?

Holding stocks as long-term investments can grow your money impressively, but you have to be patient — and some family budgets need more accessibility to those funds. Plus, while stocks like the "Magnificent 7" can be the highest ROI investments, they are less dependable in the short term. You might lose out if they swing down, and you can't always hold on until they go back up.

Short-term investments are different. They reach their total value on a specific date soon, usually no more than a few years out. If you hold the investment until then, you can rely on a payout with reasonable confidence.

The best short-term high-yield investments in 2024

The best short-term investments give you the most for your money with the least risk of loss. If that sounds like a good match for your financial goals, these might be the best investments right now.

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1. High-yield savings accounts

As the name suggests, high-yield savings accounts earn more than a traditional savings account. They're popular among online banks, which frequently wage interest rate battles to win customers. And when they battle, you win.

You can find the best interest rates with a little digging. Be sure to check all the account terms before you sign up — some high-yield savings accounts may require a certain minimum balance, require a monthly direct deposit, or restrict withdrawals.

High-yield savings accounts have FDIC insurance and offer some freedom to withdraw, making them ideal for building your emergency fund and other savings goals. 

2. Certificates of deposit (CDs)

A certificate of deposit (CD) is one of the best investments for moderate yet reliable growth. The terms are stricter than a high-yield savings account, but the rate of return is usually higher, too. That amount depends on the account and where you get it.

With a CD, you deposit money into a savings account and commit to keeping it there for a set period, typically three months to five or more years. Longer-term CDs generally have higher interest rates than shorter-term products. However, in some markets, shorter-term CDs have the highest interest rates.

CDs can have fixed or variable rates.

• Fixed rates: Stay the same until the account matures

• Variable rates: Change with market rates

3. Money market funds

Money market funds are relatively low-risk investments with a moderate potential return. They're an appealing alternative if you want to invest in the stock market but prefer less risk.

Unlike stocks and bonds, money market funds aren't direct investments. Instead, you put money in the fund, and the account manager puts that money into a short-term "debt instrument."

Debt instruments are securities that companies or governments use to raise money. Investors buy them knowing the issuer will pay them back with interest. Money market funds may invest in government, municipal, or corporate securities, but the corporate kind is primarily available to institutions. The general public mainly invests in public-sector funds, which are usually more stable.

If you want to invest in money market funds, be sure you don't accidentally choose a money market account. While they may sound similar, funds are securities investments available through brokers and other investment groups. Money market accounts behave more like high-yield savings accounts. 

4. Short-term bond funds

Short-term bond funds are time-limited investment options that pay off around two years or less. Like money market funds, they provide a way of investing in short-term securities.

One common form of short-term bond funds is the U.S. savings bond. A savings bond is basically a loan to the U.S. government, which pays back that loan with interest when the bond matures. Because it has the full backing of the U.S. government, it’s perceived as an extremely safe investment option. 

Bond funds may have fixed or variable interest rates, depending on the bonds themselves. A fixed-rate bond is particularly safe to invest in because your interest rate won't change if something happens to the market. These short-term, high-yield investments are popular with cautious investors for that reason.

5. Treasury bills (T-bills)

Treasury bills, or T-bills, are one of several types of bonds available from the U.S. government. Like U.S. savings bonds, they have the federal government's full backing, making them another of the safest investments. Plus, most Treasury securities are liquid investments, meaning you can easily sell them if you need the cash before the bill matures.

Treasury bills are the shortest-term government bonds, with maturity periods ranging from four to 52 weeks. You buy them at a discount and redeem them for full value once they mature.

Say you invest $100 in buying one 52-week T-bill. The rate on that day is 5.3%, which is close to recent averages. You pay $94.60, which is 5.3% less than the value. Then, when you sell it a year later, you get a total of $100. That's $5.36 more than you paid.

You can walk away with that $5.36 or reinvest it in another T-bill. It's still a short-term investment, but there are long-term benefits to keeping your money invested.

Make investments easy with Greenlight

Did you know? With Greenlight, you and your kids can get started with investing early. Our resource library makes it easy to understand the investing process and its terminology – like learning to read stock charts as a family! 

Then, take it to the next level and let kids explore investing hands-on. With our investing app for kids¹, you approve all trades so you can guide your child's financial journey. Start investing today, and help your kids and teens stock up on stock knowledge as they grow.

 ¹Greenlight is a financial technology company, not a bank. The Greenlight app facilitates banking services through Community Federal Savings Bank (CFSB), Member FDIC.