Maximizing a Modest Inheritance: Strategies for Sustainable Financial Growth
Celebrate that modest inheritance! Now's not the time to blow it all on a shopping spree, but it's also more than just a pile of cash sitting around. Here's how you can stretch that money to make it work for you in the long run.
First things first, take a breath and assess your financial situation. Inheriting money can be an emotional experience, especially when it comes from someone close to you. Taking some time to think things through will help you make decisions that align with your future goals.
Now that you've taken a moment to relax, let's talk about where to store your newfound wealth. Instead of leaving it languishing in a regular checking account, consider a high-yield savings account. This type of account can earn you interest while keeping your money easy to access. Mari Adam, a financial planner in Boca Raton, Florida, suggests considering a money market account at a discount brokerage firm, or a high-yield savings account at an online bank.
It's also important to be aware of any tax implications. Inheritances are generally tax-free, but there are exceptions. For example, if the inheritance includes an Individual Retirement Account (IRA), you will be subject to a different set of tax rules.
So, what do you want to do with your newfound wealth? Are you saving for a future goal, like a down payment on a house or your retirement? Or do you want to use it for something fun, like a dream vacation? The choice is yours. Just remember to think before you act, because once the money's gone, it's gone.
If you're looking to invest your money, your time frame is important. A shorter time frame usually means a more conservative investment strategy, while a longer time frame can allow for a bit more risk.
With a little thought and planning, you can make that modest inheritance go much further. And remember, the key to making wise financial decisions is to take your time, do your research, and never hesitate to speak with a financial advisor if you need help.
High-Yield Savings Account Options
- Axos Bank ONE Savings Account - APY: 4.66%
- No minimum deposit, no monthly fees, access to 95,000+ fee-free ATMs, FDIC insured, and highly competitive yields [2][3].
- My Banking Direct Savings - APY: Around 4.40%
- Online savings account with low or no fees and competitive yields, federally insured [2].
- Synchrony High Yield Savings - APY: 4.00%
- No minimum balance or monthly fees, FDIC insured, accessible online [5].
- PNC Bank High-Yield Savings - APY: 3.95%
- Competitive rates, FDIC insurance, and good customer service [5].
- Barclays Online Savings Account - APY: Starting around 4.1%, with enhanced rates for balances over $250,000 at about 4.3%
- No minimum balance, no monthly fees, FDIC insured, suitable for larger deposits [3].
These accounts provide safety, no fees or minimums, and strong yields to maximize growth while keeping funds accessible [2][3][5].
Consider investing a portion of your inheritance in a high-yield savings account like the Axos Bank ONE Savings Account, My Banking Direct Savings, Synchrony High Yield Savings, PNC Bank High-Yield Savings, or Barclays Online Savings Account to earn interest and keep your money easily accessible. Personal-finance expert Mari Adam suggests these options due to their competitive yields, no fees, and FDIC insurance.
When thinking about investing, remember to consider your time frame and risk tolerance. For example, if you're saving for a long-term goal like retirement, a more aggressive token strategy might be suitable.
