Yet Another Savings Question

November 9, 2007 10:18 AM

How can I maximize my savings for a trip I'm planning for 2009?

The wife and I are potentially going to Africa in late 2009. I've got an HSBC Direct savings account (currently 4.5%), the contents of which I'm allocating toward this trip. There's currently just over $3000 in the account, and I add $75 every week. That'll grow pretty quickly, but I'd like to know what options are available for maximizing my return. Since the trip won't be for another 2 years, I figure I can make those funds relatively illiquid if it means a higher return.

So what options are there? Obviously nothing that would be considered a "risky" investment, as I want to ensure I have a secure savings accrued come 2009. But I'd like to have something that grows even marginally faster than inflation, eh?

Thanks!

posted by sprocket87 to Work & Money (6 answers total)

Two years really isn't enough time to safely go with anything that might experience a significant drop, like stocks. Other than rolling your cash into higher-than-4.5%-interest CDs, keeping it in a high-yield online savings account is the best thing you can do.
posted by Tomorrowful at 10:21 AM on November 9, 2007

You know about bankrate.com, right? You can compare rates on loans and investments. I just searched 1-year CDs and found one paying 5.07%.
posted by salvia at 10:47 AM on November 9, 2007

Washington Mutual is doing a limited roll-out of 6% interest guaranteed for a year at some of its banks in Washington and Oregon. It's a weird account with all kinds of restrictions, but you might check your local branch to see if it's available there.
posted by croutonsupafreak at 11:16 AM on November 9, 2007

You could consider lending your money at a higher rate through a site like Prosper.com. This might entail slightly higher risk, but you can choose how risky a loan you decide to fund.
posted by bove at 11:30 AM on November 9, 2007

CD Laddering.
posted by matildaben at 11:32 AM on November 9, 2007 [1 favorite]

You could consider lending your money at a higher rate through a site like Prosper.com.

Prosper.com loans only come in three year terms, so as a lender, sprocket87 couldn't get all of his money back in time.
posted by Diggins at 11:43 AM on November 9, 2007