6 Best Investments for Frugal People

Getting started with investing can seem overwhelming . Some people might think that you need a big chunk of change to start making investments , which can be a deterrent for the frugal people among us. Fortunately, that’s not the case.

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Here are six easy ways to start investing with even just a small amount of money, according to Voya Financial :

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1. Certificate of Deposit (CD)

Purchasing a CD from the bank is a safe and secure way to guarantee a return on your money. CDs are typically sold for periods ranging from a few months to several years. Once the determined period ends, you get your money back with interest. However, you can’t touch your money until the CD matures so you’ll want to make sure you don’t need access to those funds until later on.

2. Participating in Your Employer’s Workplace Retirement Plan

An easy and smart way to save is to participate in your employer’s workplace retirement plan. You choose a percentage to allocate to the account and it gets automatically deducted from your pay each month. In some cases, employers will also provide a percentage match up to a certain amount. This way, you’ll grow your money and secure a financially sound retirement without even thinking about it.

3. Purchasing Savings Bonds

Savings bonds are a great option if you’re looking to grow your money and you’re able to let it sit until the bond fully matures. Savings bonds provide diversification and are a risk-free way to get a return on your investment. You can purchase savings bonds with maturities that usually range from as short as 30 days to as long as 30 years.

4. Starting an IRA

You can always start your own retirement account if your employer doesn’t offer one. You can choose between a Roth IRA (which requires post-tax contributions) or a traditional IRA (which requires pre-tax contributions). The beauty of a Roth IRA is that withdrawals, including the gains, are 100% tax once you reach age 59 ½.

5. Investing in ETFs and Index Funds

ETFs and index funds provide diversification and mitigate investment risk. Since these investment vehicles track currencies, stocks, bonds, and commodities, you’re investing in a basket of investments that are all encompassed in a single fund. For example, if you invest in a fund that tracks the S&P 500, you’ll be invested in the largest 500 largest publicly-traded companies in the U.S. all at the same time. This can shield you from major losses and market swings since your money will be spread across various companies.

6. Buy Fractional Shares of Stocks

In some cases, some investing platforms allow you to purchase fractional shares of stocks rather than whole shares. This can help you invest in high-value companies without using too much cash all at once. For example, rather than having to shell out $2,000 to buy just one share of a popular pharmaceutical company, you can buy .001 shares of the company for just $2.

This article originally appeared on GOBankingRates.com : 6 Best Investments for Frugal People