There are two simple options for investing a sum of $1,000 or less.
One can opt for the mutual fund route or stock route.
Both of these options have intriguing potential.
Mutual Fund Investments Investing in a mutual fund requires knowledge of mutual funds available, and then opting for one that seems to suit your requirements.
The fund must also have the minimum limit that is acceptable.
While most mutual funds have a starting limit of $2,500 for regular accounts, there are some that permit a starting amount of $1,000.
These include Invesco Funds ($1,000) or the Pax World Fund ($250).
Once the fund is identified, a choice has to be made out of the different types of accounts offered.
Custodial accounts are primarily for children opened by parents or relatives.
Joint accounts are generally for two people like a husband and wife wanting an account together.
Individual Retirement Accounts (IRA) are mainly a way of saving with tax benefits which can be used after retirement.
Regular accounts are the standard accounts with funds.
Investing in Stocks Investing in stocks requires sound knowledge of the stock market, so that one picks up good well-performing stocks.
This can be done either by DSP's or opening a low-cost investing account online.
A Direct Stock Plan (DSP) is an option to invest in stocks with a very small commission.
This is good for small investors but they must plan to hold the stocks for at least one year.
The other alternative is to open an online low cost investing account with a low cost online broker.
Examples of such brokers are Scottrade, Ameritrade and Sharebuilder.
Both options bring returns higher than savings accounts and are more advisable to adopt.