How to Invest $100

You may be wondering how you can start investing with very little money. For example, if you recently received $100 as a gift or from your tax return and you want to save it and make it grow, these ideas are great investments. You'll be surprised how quickly your money can increase and how much fun you can have investing.

Instructions

Difficulty: Easy

Things You’ll Need:

• $100 or more
• Internet connection (which you have)

1. Open a savings account. This is the simplest option. Simply go to your local bank or shop around online for the best rate. You probably won't earn much, but your money will be safe.
2. Invest in CDs. Certificate of deposit accounts, or CDs, allow you to invest your cash for a set period of time (3, 6, and 12 months or longer). You lock in a guaranteed rate of return which is paid to you plus your initial $100 at the end of the term. Some banks give you the option to receive your interest monthly. One caveat is that most banks have minimum deposit amounts that are usually $1000. However, if you invest with ING Direct, you can open a CD with any dollar amount.
3. Purchase stocks. Like CD accounts at banks, many brokers have a minimum investment amount to purchase stocks. Sadly this amount is much larger than $100. Don't fret though, all is not lost in this category. Some discount brokers now exist online that will allow investments of $100 or less. My favorite example is Share Builder. You can invest your $100 in any stock you like (as long as it is on their approved list as most are). You could even invest $50 each in two stocks. Share Builder does charge $4 for each stock purchase, however. Let's say you want to put your entire $100 into stock of the company you work for. If the share price is $75, you would receive 1.28 shares for $96 with $4 going for the purchase fee. If your company pays dividends, Share Builder will reinvest them in partial shares for no charge. This is one of the best options for purchasing stocks with $100.

Tips & Warnings

• Each of the three tips above are listed in order from least risky to most risky.
• There are other options for investing, such as forex trading, that are even more risky than stocks. The above options are excellent places to start if you are new to investing.
• If purchasing stocks, try to avoid the temptation to sell on a dip in the price. A rebound may be just a few days away.