Where to invest your stimulus check if you don’t need the money right now

The US government began depositing the $1200 Coronavirus Stimulus checks in people’s accounts last week and will continue direct deposits and sending out checks to qualifying individuals for the next few months.

For many, the $1200 is not nearly enough to patch the hole ripped in their financial well-being which has been caused by stay-at-home orders and the forced closure businesses.

If this is the case, don’t worry about investing your stimulus checks — paying down your debt (especially credit card debt which is notoriously high interest) should be your primary objective.

In fact many credit card companies, landlords and banks have been very good about pausing payments for a couple months, so don’t hesitate to inquire.

But, if you are lucky enough to be in a secure position financially — investing that $1200 rather than letting it burn a hole in your pocket — is a very wise move.

The 5 best ways to invest your stimulus check

Save it for a rainy day

Despite how bad things are now, there is no clear sign as to when this will end (or if this is the worst it will get) so there is a chance you might need that money down the road.

Stocks and equities are a great investment for growth but also present the risk of losing a lot of money should the market drop again.

So, if don’t want to end up with less than you started with — take a look at a high interest savings account or bonds.

A high interest savings account is a regular bank account but tends to usually be offered by online only banks.

Because the banks can save money by not having physical locations or having to pay tellers, they pass the money onto their members in the form of higher interest rates.

And despite all-time low for interest rates, places like Marcus by Goldman Sachs are still offering 1.55% APY at the time of writing.

This means that your $1200 will be $1218 after a year — not bad for just parking it in a bank.

However $18 isn’t that much in the long run, so if you want to get a greater return, perhaps look at buying privately traded bonds.

Small peer to peer lenders and credit unions tend to offer higher interest rates and a higher level of certainty than equities.

I personally really like Worthy Bonds which offers a great 5% interest while also helping small businesses across America by lending them money.

Putting your $1200 in Worthy for a year would earn you an extra $61 in interest, and if you sign-up with this link they’ll even give you an extra $10 in your account. 

Give it to robots

The stock market is always carries with it a large amount of risk and reward and right now is a prime example.

In the past two months we have seen both the largest single day drop and largest bull market in history.

Many people might opt to buy specific stocks traditional brokerages like Fidelity or Robinhood, but for a more hands-off approach consider giving a robo-investor a try.

They are a new breed of investing platform which smartly invests your money in the market based off your age and risk tolerance.

Companies like Betterment and Wealthfront offer robo-investing which let’s you schedule automatic investments so you can dollar cost average your $1200 into the market during these volatile times.

Wealthfront will manage your first $5000 free if you signup with this referral link so you won’t have any management fees nibbling away at your money’s growth.

“Invest” in your future

While a retirement fund is definitely one way to invest in your future (and many people should consider adding at least some of this money to theirs), there are other ways to “invest” money today that will improve your tomorrows.

With the pandemic showing just how important health is, now would be great time to pickup a new active hobby, purchase new workout equipment or signup for online/in-app fitness classes.

Many bike makers, fitness equipment companies, and fitness coaches are all offering Covid-19 related discounts so take advantage of the time to improve your health.

You can also take this time to improve your skills, pick-up a hobby you’ve always wanted to try, or become more proficient at something you already enjoy.

Even though this can be done for free via various blogs and YouTube videos, consider spending a little to take an online course via SkillShare or Lynda.com.

Not only are their courses taught by experts but spending money on the lessons will make you more committed to learning the new skills.

Buy some currency for the future

Many people have heard of Bitcoin and other cryptocurrencies but a relatively few people own any.

This could change in the coming years — with many countries’ potentially facing bankruptcy from the current coronavirus pandemic, people around the world could quickly lose trust in traditional fiat currencies.

Bitcoin, Etherium and a host of other cryptocurrencies (including FaceBook’s Libra) will be the easiest choice for many.

That makes now a very good time to purchase some Bitcoin before the price rises substantially.

The easiest way to do this is on a cryptocurrency exchange like Coinbase.

They even offer 5% interest on cryptocurrencies like Tezos and will give you $10 in Bitcoin when you sign up.

Give back those who need it more

The last way to invest your $1200 stimulus check is a way that won’t ever likely see you getting monetary rewards but will pay dividends for years to come.

Donating some or all to those who are far worse off is a help people locally in your community, throughout the US, or even somewhere else in the world.

Here’s a great list of a couple dozen verified charities that are doing great work in this unprecedented time of need.

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As of writing I have yet to receive my stimulus money, but plan on giving half of it to a charity that works to fight hunger in my local Boston area.

I don’t usually write articles like this (usually more about drones and cameras), but considering the current situation, I thought it might be helpful to many.

Hopefully, this helps you invest your stimulus check wisely so the money can be best used to help you, your community or your future self.

* These tips are all just my opinion and should only be taken as such: Please do your own research, especially when investing in volatile assets or equities.