Hello Bruuzu,
I saw in another thread that you're 19. It's really impressive to have the discipline to save that kind of money at that age. With that discipline and the other qualities you're showing here, you have a bright future.
Here are a couple of thoughts:
1. I assume you don't have any debt. If you do pay it off. It's unlikely any safe investment is going to pay you what the debt is going to cost you. But beyond that, the freedom and flexibility of not having debt is a significant advantage.
2. I heard an interview with Mark Cuban (Dallas Mavericks owner, Shark Tank personality) a few years ago. In that interview, he answered exactly this question: Where should someone invest who doesn't have the millions to attract the big deals? I thought his response was brilliant, if not exactly the exciting, sexy approach everyone is hoping for,
He said you're far better using your money to leverage your buying power for things you need anyway. For instance, if you buy a year's worth of toothpaste at Costco and can save 40% on what you'd spend buying a tube at a time at the grocery store, you're going to be way ahead of taking that same money and investing it anywhere else. There's nowhere safe that you can anticipate making 40% a year on your money. (And actually, if you spend $.60 to get $1.00 of value, you're actually getting a return of 67%, not just 40%). But you can only do that if you have the cash in reserve to afford it. There are a lot of things that you buy that you can do that with. And there are other things (perhaps a car?) that you can negotiate a better deal if you can offer cash. It's not always the case for a car, because many dealerships what to finance it and then sell the loan, or they get a kickback from the lender for making the loan, but there are things, large and small, where you can get a cash discount.
3. Consider your long-term goals. Do you want a house? You generally need at least 5% down, so depending on what part of the country you live you might alread be close -- although if you can get to 10% or even 20%, all the better. Even if you live in a more expensive part of the country, at the rate you save, you can get there fast (and by fast, I mean a few years).
If a house is your goal, you don't want to tie your money up in a way that it's difficult (or costly) to get it back out or in a way that has the potential of for short-term losses that would set your plans back. In that case, 2.10% (and using the money like I suggested in #2) isn't a bad way to go.
4. CreditGuyinDixie's advice it open an IRA is solid. If you're not looking to buy a home in the next 5 or 10 years, then I'd agree with him to make the whole $5500 contribution to an IRA for 2018 (which, as he said, you can do until April 15, 2019). I would open a self-directed IRA with somewhere like TDAmeritrade and then use the funds in your IRA to buy Exchange Traded Funds (ETFs). An ETF is a fund that you pay into, and then the fund manager buys a broad range of stocks (or bonds or real estate or whatever kind of ETF it is). It's similar to a mutual fund, but is much easier to trade.
For instance, Vanguard Total Stock Market Index (VTI) is an ETF that owns a broad range of domestic (American) stocks. It closed at $134.90 today, which was up $1.08 or 0.81%. It is usually going to roughly follow the DOW (which was up 0.67% today) or the S&P500 (which was up 0.76% today). Just like the DOW, it's going to go up and down, but if you own it from now until you retire in 40 years or so... well, there are no guaratees in life, but 40 years ago in 1979, the DOW was around 3000, so it's up around 8000% for that period of time. It's about as safe a long-term bet as there is (probably even safer than a house -- but then, you can't live in an ETF).
Because an ETF spreads your investment over a lot of different stocks (or bonds, commodities, real estate, etc.), you're never going to see the astronomical short-term gains that you would have if you'd have bought Apple in 2000 or something like that. But unlikely to see major crashes either (at least, not more than the DOW). And VTI is offered commision free on TDAmeritrade, so you don't have that cost up front.
I just mean that as an example. I'm not guaranteeing anything. And, full disclosure, I do have a reasonable portion of my IRA invested in VTI.
Anyway, that's my 2 cents. More than I intended to write, but good luck to you!
