How do I begin investment saving, rather than just saving in a bank account?
In general, the higher the return (such as interest), the higher the risk. If there were a high-return no-risk investment, enough people would buy it to drive the price up and make it a low-return no-risk investment. Interest rates are low now, but so is inflation. They generally go up and down together. So, as a low risk (almost no-risk) investment, the savings account is not at all useless. There are relatively safe investments that will get a better return, but they will have a little more risk. One common way to spread the risk is to diversify. For example, put some of your money in a savings account, some in a bond mutual fund, and some in a stock index fund. A stock index fund such as SPY has the benefit of very low overhead, in addition to spreading the risk among 500 large companies. Mutual funds with a purchase or sale fee, or with a higher management fee do NOT perform any better, on average, and should generally be avoided. If you put a little money in different places regularly, you'll be fairly safe and are likely get a better return. (If you trade back and forth frequently, trying to outguess the market, you're likely to be worse off than the savings account.) CDs may be one good option if you have a sense of when you may need the money(-ish), especially with more generous early withdrawal penalties. You can also take a look at investing in a mix of stock and bond funds, which will lower you volatility compared to stocks, but increase your returns over bonds.
Yes, you should be saving for retirement. There are a million ideas out there on how much is a reasonable amount, but I think most advisor would say at least 6 to 10% of your income, which in your case is around $15,000 per year. You give amounts in dollars. Are you in the U.S.? If so, there are at least two very good reasons to put money into a 401k or IRA rather than ordinary savings or investments: (a) Often your employer will make matching contributions. 50% up to 6% of your salary is pretty common, i.e. if you put in 6% they put in 3%. If either of your employers has such a plan, that's an instant 50% profit on your investment. (b) Any profits on money invested in an IRA or 401k are tax free. (Effectively, the mechanics differ depending on the type of account.) So if you put $100,000 into an IRA today and left it there until you retire 30 years later, it would likely earn something like  $600,000 over that time (assuming 7% per year growth). So you'd pay takes on your initial $100,000 but none on the $600,000. With your income you are likely in a high tax bracket, that would make a huge difference. If you're saying that you just can't find a way to put money away for retirement, may I suggest that you cut back on your spending. I understand that the average American family makes about $45,000 per year and somehow manages to live on that. If you were to put 10% of your income toward retirement, then you would be living on the remaining $171,000, which is still almost 4 times what the average family has. Yeah, I make more than $45,000 a year too and there are times when I think, How could anyone possibly live on that? But then I think about what I spend my money on. Did I really need to buy two new computer printers the last couple of months? I certainly could do my own cleaning rather than hiring a cleaning lady to come in twice a month. Etc. A tough decision to make can be paying off debt versus putting money into an investment account. If the likely return on investment is less than the interest rate on the loan, you should certainly concentrate on paying off the loan. But if the reverse is true, then you need to decide between likely returns and risk. "I'll try to give you some clues on how to find an answer to your question, rather than answering directly the question asked.  Why not answer it directly? Well, I can, but it won't help you (or anyone else) much in two months when the rates change again. Generally, you won't find such in brick-and-mortar banks. You can save some time and only look at online banks. Examples: ING Direct (CapitalOne), CapitalOne, Amex FSB, E*Trade, Ally, etc. There are plenty. Go to their web sites, look for promotions, and compare. Sometimes you can find coupons/promotions which will yield more than the actual savings rate. For example, ING frequently have a $50 promotion for opening a new account. You need to understand that rates change frequently, and the highest rate account today may become barely average in a week. There are plenty of sites that offer various levels of comparison information. One of the most comprehensive ones (IMHO) is Bankrate.com. Another place to look is MoneyRates.com. These sites provide various comparisons, and you can also find some promotions advertised there. There are more similar sites. Also, search the Internet and you can find various blog posts with additional promotions – frequently banks give ""referral bonuses"" to provide incentive for clients to promote the banks. Do some due diligence on the results that appear promising. Not much. You won't find any savings account that would keep the value (purchasing power) of your money over the long term. Keeping money in savings accounts is a sure way to lose value because the inflation rate is much higher than even high-yield savings accounts. But, savings accounts are safe (insured by FDIC/NCUA up to the limit), and very convenient to keep short term savings – such as an emergency fund – that you cannot afford to lose to investments. Sometimes you'll get slightly better rates by locking up your money in a Certificate of Deposit (CD), but not significantly higher when the CD is short-term." "In my opinion, you can't save too much for retirement. An extra $3120/yr invested at 8% for 30 years would give you $353K more at retirement.  If your ""good amount in my 401k"" is a hint that you don't want us to go in that direction, then how about saving for the child's college education? 15 years' savings, again at 8% will return $85K, which feels like a low number even in today's dollars, 15 years of college inflation and it won't be much at all.  Not sure why there's guilt around spending it. If one has no debt, good retirement savings level, and no pressing need to save for something else, enjoying one's money is an earned reward.  Even so, if you want a riskless 'investment' just prepay the mortgage. You'll see an effective return of the mortgage rate, 4%(?) or so, vs the .001% banks are paying. Of course, this creates a monthly windfall once the mortgage is paid off, but it buys you time to make this ultimate decision.  In the end, I'd respond that similar to Who can truly afford luxury cars?, one should produce a budget. I don't mean a set of constraints to limit spending in certain categories, but rather, a look back at where the money went last year and even the year before that. What will emerge are the things that are normal, the utility bills, tax bill, mortgage, etc, as well as the discretionary spending. If all your current saving is on track, the investment may be in experiences, not financial products." "Okay. Savings-in-a-nutshell. So, take at least year's worth of rent - $30k or so, maybe more for additional expenses. That's your core emergency fund for when you lose your job or total a few cars or something. Keep it in a good savings account, maybe a CD ladder - but the point is it's liquid, and you can get it when you need it in case of emergency. Replenish it immediately after using it. You may lose a little cash to inflation, but you need liquidity to protect you from risk. It is worth it. The rest is long-term savings, probably for retirement, or possibly for a down payment on a home. A blended set of stocks and bonds is appropriate, with stocks storing most of it. If saving for retirement, you may want to put the stocks in a tax-deferred account (if only for the reduced paperwork! egads, stocks generate so much!). Having some money (especially bonds) in something like a Roth IRA or a non-tax-advantaged account is also useful as a backup emergency fund, because you can withdraw it without penalties. Take the money out of stocks gradually when you are approaching the time when you use the money. If it's closer than five years, don't use stocks; your money should be mostly-bonds when you're about to use it. (And not 30-year bonds or anything like that either. Those are sensitive to interest rates in the short term. You should have bonds that mature approximately the same time you're going to use them. Keep an eye on that if you're using bond funds, which continually roll over.) That's basically how any savings goal should work. Retirement is a little special because it's sort of like 20 years' worth of savings goals (so you don't want all your savings in bonds at the beginning), and because you can get fancy tax-deferred accounts, but otherwise it's about the same thing. College savings? Likewise. There are tools available to help you with this. An asset allocation calculator can be found from a variety of sources, including most investment firms. You can use a target-date fund for something this if you'd like automation. There are also a couple things like, say, ""Vanguard LifeStrategy funds"" (from Vanguard) which target other savings goals. You may be able to understand the way these sorts of instruments function more easily than you could other investments. You could do a decent job for yourself by just opening up an account at Vanguard, using their online tool, and pouring your money into the stuff they recommend." The best way I know of is to join an investment club.  They club will act like a mutual fund, investing in stocks researched and selected by the group.  Taking part in research and presenting results to the group for peer review is an excellent way to learn.  You'll learn what is a good reason to invest and what isn't. You'll probably pick both winners and losers. The goal of participation is education.  Some people learn how to invest and continue happily doing so. Others learn how to invest in single stocks and learn it is not for them. One of the simplest things is to lock your money e.g. put on time deposit which has some penalty when you broke them pre-maturily. Also create a portfolio in a site, this will spark interest on saving and investment. The S&P 500 is a stock market index, which is a list of 500 stocks from the largest companies in America. You could open a brokerage account with a broker and buy shares in each of these companies, but the easiest, least expensive way to invest in all these stocks is to invest in an S&P 500 index mutual fund. Inside an index mutual fund, your money will be pooled together with everyone else in the fund to purchase all the stocks in the index.  These types of funds are very low expense compared to managed mutual funds.  Most mutual fund companies have an S&P 500 index fund; two examples are Vanguard and Fidelity.  The minimum investment in most of these mutual funds is low enough that you will be able to open an account with your $4000. Something you need to keep in mind, however: investing in any stock mutual fund is not non-risk.  It's not even low-risk, really.  It is very possible to lose money by investing in the stock market.  An S&P 500 index fund is diversified in the sense that you have money in lots of different stocks, but it is also not diversified, in a sense, because it is all in large cap American stocks.  Before investing in the stock market, you should have a goal for the money you are investing.  If you are investing for something several years away, an index fund can be a good place to invest, but if you will need this money within the next few years, the stock market might be too risky for you. "So, you have $100k to invest, want a low-maintenance investment, and personal finance bores you to death. Oooohhh, investment companies are gonna love you.  You'll hand them a wad of cash, and more or less say ""do what you want.""  You're making someone's day.  (Just probably not yours.) Mutual fund companies make money off of you regardless of whether you make money or not.  They don't care one bit how carefully you look at your investments.  As long as the money is in their hands, they get their fee. If I had that much cash, I'd be looking around for a couple of distressed homes in good neighborhoods to buy as rentals.  I could put down payments on two of them, lock in fixed 30-year mortgages at 4% (do you realize how stupid low that is?) and plop tenants in there.  Lots of tax write-offs, cash flow, the works.  It's a 10% return if you learn about it and do it correctly. Or, there have been a number of really great websites that were sold on Flippa.com that ran into five figures.  You could probably pay those back in a year.  But that requires some knowledge, too. Anything worthwhile requires learning, maintenance and effort. You'll have to research stocks, mutual funds, bonds, anything, if you want a better than average chance of getting worthwhile returns (that is, something that beats inflation, which savings accounts and CDs are unlikely to do).  There is no magic bullet.  If someone does manage to find a magic bullet, what happens?  Everyone piles on, drives the price up, and the return goes down. Your thing might not be real estate, but what is your thing?  What excites you (i.e., doesn't bore you to death)? There are lots of investments out there, but you'll get out of it what you put into it."