8 Small Investments That Actually Make Money in 2025

Are you tired of having your money just sit there doing nothing? Yeah, me too. I’ve spent countless hours researching small investment options that don’t require a fortune to start but can actually grow your wealth over time

In this article, I’ll share 8 small investments that are actually making money for everyday people in 2025 The best part? You don’t need to be a Wall Street genius or have thousands of dollars to get started

Why Small Investments Matter

Before diving into specific options let’s be real about why small investments are worth your time

• Low barrier to entry: You can start with just $100 in many cases
• Risk diversification: Spreading small amounts across different investments limits your exposure
• Compound growth potential: Even small amounts can grow significantly over time
• Financial education: Starting small helps you learn investment principles without major risk

As someone who started investing with just a few hundred dollars, I can tell you that small investments add up faster than you might think!

8 Small Investments That Can Make Money

1. High-Yield Savings Accounts

I know what you’re thinking – “savings accounts aren’t investments!” But hear me out. High-yield savings accounts are currently paying interest rates around 4.66%, which is significantly higher than the national average.

How it works: You deposit money into an FDIC-insured account and earn interest on your balance.

Example: If you put $1,000 in a high-yield savings account paying 4.66% APY, you’d earn about $46.60 in one year with minimal risk.

Why I like it: These accounts are highly liquid, meaning you can access your money quickly if needed. Plus, they’re insured by the FDIC up to $250,000 per depositor, so your money is safe.

2. Money Market Accounts

Money market accounts are similar to savings accounts but typically offer slightly higher interest rates in exchange for higher minimum balances.

How it works: You deposit money with a bank or credit union and earn interest while maintaining some check-writing abilities.

Example: With a $1,500 initial deposit in a money market account paying around 4% APY, you could earn about $60 in a year.

Why I like it: Money market accounts give you a bit more flexibility than traditional savings accounts while still keeping your money relatively safe and accessible.

3. Short-Term Certificates of Deposit (CDs)

If you don’t need immediate access to your cash, no-penalty CDs can offer better returns than savings accounts.

How it works: You agree to leave your money with a bank for a fixed period (ranging from weeks to years), and in return, the bank pays you a guaranteed interest rate.

Example: A 1-year CD might pay 4.5% on a $1,000 investment, giving you $1,045 when the CD matures.

Why I like it: No-penalty CDs give you the benefits of higher, fixed interest rates while still allowing you to withdraw your money without penalties if better opportunities arise.

4. Dividend Stocks

Companies that distribute part of their earnings to shareholders through dividends can provide a steady income stream plus potential growth.

How it works: You buy shares of dividend-paying companies and receive regular payments (typically quarterly).

Example: If you invest $500 in a stock with a 3% dividend yield, you’d earn about $15 per year in dividends, plus any potential stock price appreciation.

Why I like it: Dividend stocks combine the potential for share price growth with regular income payments, giving you two ways to make money.

5. Dividend ETFs and Index Funds

If picking individual stocks seems intimidating (it was for me at first!), dividend ETFs (exchange-traded funds) and index funds offer an easier way to invest in multiple dividend-paying companies at once.

How it works: You buy shares of a fund that holds many dividend-paying stocks, spreading your investment across dozens or hundreds of companies.

Example: With $300 invested in a dividend ETF with a 4% yield, you could earn about $12 per year in dividend payments, plus any fund appreciation.

Why I like it: This approach gives you instant diversification and professional management without requiring you to analyze individual stocks.

6. Short-Term Government Bond Funds

Government bonds are considered some of the safest investments, and short-term bond funds minimize the risk of interest rate fluctuations.

How it works: You invest in a fund that purchases bonds issued by the U.S. government and its agencies.

Example: A $500 investment in a short-term government bond fund might return 3-4% annually, or $15-20 per year.

Why I like it: These funds offer relatively stable returns with very low risk compared to stocks or corporate bonds.

7. Money Market Funds

Don’t confuse these with money market accounts! Money market funds are mutual funds that invest in short-term, high-quality debt instruments.

How it works: You buy shares of a money market mutual fund through a broker, which invests in Treasury bills, municipal bonds, and other short-term securities.

Example: With current yields over 4%, a $1,000 investment could earn you more than $40 in a year.

Why I like it: Money market funds provide liquidity and better returns than typical bank accounts, though they aren’t FDIC-insured like bank products.

8. Cryptocurrency Staking

This is definitely the riskiest option on the list, but for those willing to venture into digital assets, crypto staking can provide significant returns.

How it works: You “stake” or lock up certain cryptocurrencies to help verify transactions on their networks and earn rewards in the form of additional crypto.

Example: Staking Ethereum on Coinbase currently offers around 2% APY, so staking $500 worth could earn you about $10 worth of additional ETH in a year.

Why I like it: Though volatile, staking provides a way to earn passive income on crypto holdings rather than simply hoping for price appreciation.

Comparing Your Options

To make this easier, I’ve created a quick comparison table of these small investment options:

My Personal Strategy for Small Investments

When I first started investing with small amounts, I made some mistakes. I tried to chase high returns without considering risk, and I spread myself too thin across too many different investments.

Now, I follow a simple approach:

1. Start with safety: I keep an emergency fund in a high-yield savings account
2. Diversify gradually: I allocate small amounts to different investment types rather than putting everything in one place
3. Reinvest returns: I automatically reinvest dividends and interest to accelerate growth
4. Increase contributions: Whenever possible, I add to my investments, even if it’s just $20 or $50
5. Stay patient: Small investments need time to grow through compounding

Tips for Investing Money for Five Years or Less

If you’re planning to need your money within five years, here’s what I recommend:

• Focus on safety over returns: When your time horizon is short, protecting your principal should be the priority
• Avoid chasing high yields: A slightly higher return isn’t worth significantly more risk for short-term goals
• Match the investment to your needs: Consider when you’ll need to access the money and choose accordingly
• Be aware of differences in protection: Bank products have FDIC insurance, but market-based products don’t
• Watch out for fees: With small investments, fees can quickly eat into your returns

Getting Started with Small Investments

Ready to start? Here’s a simple action plan:

1. Determine how much you can invest: Even $100 is enough to begin
2. Clarify your timeframe: Are you investing for 1 year, 5 years, or longer?
3. Assess your risk tolerance: Be honest about how much fluctuation you can handle
4. Open the appropriate accounts: Most options require a brokerage account or bank account
5. Set up automatic contributions: Even small regular additions will boost your results dramatically

Final Thoughts

I’ve tried all these investment options with varying degrees of success. What I’ve learned is that the “best” small investment depends on your personal situation, timeline, and goals.

The most important thing is simply to start. Even if you only have $50 or $100 to invest, putting that money to work now gives it more time to grow.

Remember, building wealth isn’t about making one perfect investment decision—it’s about making many small, smart choices consistently over time.

Have you tried any of these small investments? I’d love to hear about your experiences in the comments!

Comparing the best investment options for short-term money