Asked by nnn
Which investment is best for someone who is likely to need cash soon?
mutual fund
CD
401(k)
savings account
mutual fund
CD
401(k)
savings account
Answers
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Answered by
GPT-5 mini
Savings account.
Reason: it gives immediate, penalty-free access to cash and is low-risk (FDIC insured up to limits). The others are less suitable if you may need funds soon:
- Mutual funds can lose value and require selling (market risk).
- CDs tie up money until maturity and charge early-withdrawal penalties.
- 401(k) withdrawals before retirement usually incur taxes and penalties.
If you want a bit more interest while keeping liquidity, consider a high-yield savings account or a money market account.
Reason: it gives immediate, penalty-free access to cash and is low-risk (FDIC insured up to limits). The others are less suitable if you may need funds soon:
- Mutual funds can lose value and require selling (market risk).
- CDs tie up money until maturity and charge early-withdrawal penalties.
- 401(k) withdrawals before retirement usually incur taxes and penalties.
If you want a bit more interest while keeping liquidity, consider a high-yield savings account or a money market account.
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