Congratulations on starting your nest egg, especially while you are still young enough for it to grow for many decades! Unfortunately, $1000 doesn't go very far in the world of investing. Many brokerage houses won't even open an account for that sum, and if they do, be prepared to pay all sorts of maintenance & service fees (on top of expense ratios and any loads that may be incurred by the investment fund) that will eat away at your money, not just earnings but deposits as well. The point of investing is not to make money for Fidelity, Vanguard, or T. Rowe Price (the Big Three brokerage houses), but rather to make money for YOU!

I know money funds like CDs and Money Markets are paying almost zero these days, but they are very safe. Start one at your bank. It sounds as though taxes have already been paid on your $1000 so a ROTH IRA in the form of a bank CD is an excellent option. Then, next year, try to add another $1000, or even $1100! Keep it up and in a few years you'll have a nice little bundle. Now look at brokerage firms and investing without any service/maintenance fees. Even with near-zero interest rates, you will be better off at this point than if you had gone with a brokerage in the beginning.

Index funds, those funds that mirror the entire stock market, outperform 80% of the actively managed funds out there! And they have very low expense ratios as well (MUCH lower than actively managed funds)! Index funds are great for anyone who is saving for the long term. Stick with a portfolio of 75% US Stock Indexes & 25% International Stock Indexes. No need to start buying bonds until you are much older starting in your mid 40s.

Good luck!

invest in a reasonably priced mutual fund like vanguard s&p 500 OR

(jmo) invest in three or four stocks which have a history of dividend increases every year like PG.

the dividends are taxed at 15% and if you hold the stock over one year and sell for some reason, again the tax is 15%.

I would stay away from Bonds as interest rates rising in the future will erode the value of the bonds.

I would consider starting an IRA but don't go overboard in investing in it.

Get yourself a Roth IRA from vanguard, fidelity or Troweprice

A roth ira is the best investment that you can make while young. Contribution can be withdrawn anytime but the earnings are taxed before 59 1/2

Take Cate

I am looking to put away money so that in can earn interest for my retirement. I am 25 years old and I have $1,000 to start with. I'm just clueless on what's best for me to do. Stocks? Bonds? IRA? Money market account? Someone help me!