While there is nothing wrong with asking for cash as a wedding gift, you want to do it politely, according to Peggy Post, author of Emily Post’s “Wedding Etiquette.” However, before investing any money you receive, you might want to talk to a financial planner or hire an investment broker, especially if you have no ideas about how to invest it. If you don’t want to pay someone else a fee for investment advice, there are some safer investments that you can manage on your own and still earn a return.
Purchase savings bonds. U.S. savings bonds take seven years or more to mature and can be a good way to invest money that you don’t need for awhile. There is little risk in purchasing savings bonds, as you purchase a bond at a cost of half its face value. For example, if a bond will someday mature to $100, you pay $50 at the time you purchase the bond.
Buy a certificate of deposit or open a money market account. These allow you to earn profits on your money with little or no risk. If you open a CD, you must leave the money in the account for a specific length of time, usually from several months to five years. Many times you can earn up to 5 percent on a one-year certificate of deposit. You can usually earn about 3 percent on money market accounts, which is still at least percent higher than most high-yield savings accounts.
Open a mutual fund. Although this type of investment involves some risk, over time you can earn a return on your initial investment. You can save paying out money on commissions by buying a fund directly from the company that manages it instead of from a brokerage firm. In general, mutual funds require that you invest a minimum of $2,500.
Put some of your wedding money into an IRA account. Not only will you receive tax benefits on your investments, you can save for your retirement. The money that you and your spouse place into your IRA accounts will be invested to earn you more money over the years. Continue to make regular deposits to your account.
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