Safe Investments Littleton CO

Q: I am a 23 year old graduate student at NC State.  Recently, I've been able to save about three grand. Woohoo!  However, I'm afraid I have a $3,500 credit card debt at an interest rate of 17%.  I know it's smartest to pay off the debt first, but I'm stubborn and have never traveled. 

I would like to invest $1,000 into something that is relatively safe, but will have accumulated a bit more in two to three years when I decide to see the world.  In the meantime, the rest of my savings will go towards the credit card. Do you have any advice on where to invest? 

A: Congratulations on your savings!  I agree with you that your first strategy should be to pay down some or all of your credit card debt with a 17% interest rate.  That should be your first priority.  You might also shop around for a credit card that offers a more favorable rate, particularly if you do not pay off your balance every month.

In terms of investing your $1,000, you have several alternatives.  You indicate that you want something safe and that you will need the money in two to three years.  In light of your desire for safety relatively short time frame, I would suggest a certificate of deposit, a money market account, or a bank savings account.  Unfortunately, none of these will pay a very high return in this interest rate environment, but they are safe types of investments. 

Another alternative would be a Treasury bill or Treasury note.  Both of these can be purchased in denominations of $1,000 and are backed up by the full faith and credit of the U.S. government....