With $100K to invest, consider different accounts and investments available to you, alongside potential taxes and fees.
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Whether you’ve received a windfall or steadily built savings over the years, $100,000 is a significant opportunity to start or continue building long-term wealth.
In this article, we’ll assume you’re already standing on solid financial ground: You have no high-interest debt, you’ve got an adequate cash cushion to cover an emergency and you can easily cover your monthly expenses.
So, you’ve got $100,000 burning a hole in your pocket? First off, congrats! Whether it’s from an inheritance, selling your business, or years of disciplined saving, having $100k to invest is a serious opportunity But now comes the hard part – figuring out where to put all that cash to work for you over the next year
I’ve been researching investment options for my clients (and honestly, dreaming about what I’d do with my own future windfall), and I’m excited to share some solid strategies for making the most of your money in 2025.
First Things First: Know Yourself as an Investor
Before you start throwing money at random investments, take a minute to think about what kind of investor you really are. This isn’t just financial mumbo-jumbo – it’s about being honest with yourself.
Are you the type who loves researching stocks and checking market trends? Or would you rather set it and forget it? Your investment style will heavily influence where your $100k should go
There are basically three types of investors:
- DIY Investors: If you enjoy doing research and making your own investment decisions, opening a brokerage account might be your best bet.
- Hands-Off Investors: If you want professional guidance without the premium price tag, a robo-advisor could be perfect for you.
- Those Wanting Full Service: If you prefer personalized guidance for your entire financial picture, working with a financial advisor makes sense (though it’ll cost more).
Your risk tolerance matters too. Higher risk tolerance? More of your portfolio might go toward stocks. Lower risk tolerance? You’ll probably want more bonds and stable investments.
Pay Off High-Interest Debt First!
Look, I know investing sounds sexier than debt payoff, but trust me on this. If you’ve got credit card debt with a 21% interest rate, paying that off is effectively giving yourself a guaranteed 21% return on your money. No investment can reliably beat that!
The average credit card interest rate in 2025 is around 21%, which is WAY higher than what you can expect from the stock market over time. Before you invest a penny, tackle any high-interest debt you’ve got hanging around.
Pro tip: If you have multiple credit cards with balances, consider a balance transfer card to consolidate and potentially get an introductory 0% APR period while you pay it down.
Don’t Skip the Emergency Fund
I know, I know. Emergency funds are boring. But they’re essential. Before investing your entire $100k, make sure you’ve got 3-6 months of expenses saved in an easily accessible account.
Think about it – what would happen if you lost your job tomorrow? Or if your car suddenly needed a $3,000 repair? That emergency fund is your financial safety net.
Where to keep it? High-interest savings accounts are currently offering decent rates. Some online banks are paying over 4% in 2025, which isn’t bad for money you can access instantly!
Top Investment Options for Your $100k in 2025
Ok, now for the fun part! Let’s talk about where you can actually put that money to work:
1. Stock Market Investments
The stock market has historically been one of the best places to grow wealth over time. Here are some ways to get in:
Index Funds, ETFs, and Mutual Funds
These are basically baskets of investments that give you instant diversification. Instead of picking individual stocks, you’re buying tiny pieces of many companies at once.
- Index Funds: These track specific market indexes like the S&P 500 (the 500 largest publicly traded American companies). They typically have low fees and outperform actively managed funds over the long term.
- ETFs (Exchange-Traded Funds): Similar to index funds but trade like stocks. Often have lower costs than mutual funds.
- Mutual Funds: Managed by professionals who pick investments for you. Usually have higher fees than index funds, but some actively-managed funds do outperform the market.
Individual Stocks
If you enjoy researching companies and have the time to monitor your investments, buying individual stocks might be appealing. Just remember – this approach requires more work and carries more risk than diversified funds.
2. Real Estate Investments
Real estate is another popular place to put $100k. You’ve got options here:
REITs (Real Estate Investment Trusts)
These let you invest in real estate without actually buying property. They trade like stocks and often pay nice dividends. Many investors love them for passive income.
Physical Property
With $100k, you could make a down payment on investment property in many parts of the country (though probably not in NYC or San Francisco!). Rental properties can provide both income and appreciation over time.
Fun fact: I have a friend who used $80k as a down payment on a duplex in 2022. He lives in one unit and rents out the other, which basically covers his entire mortgage!
3. Safer Options for Conservative Investors
Not everyone wants to risk their $100k in the market. If that’s you, consider:
High-Yield Savings Accounts
Online banks are offering much better interest rates than traditional banks – some over 4% in 2025. Your money stays liquid and FDIC-insured.
Certificates of Deposit (CDs)
Lock your money away for a specific time period (from months to years) in exchange for a guaranteed return. Jumbo CDs (specifically for balances of $100,000+) might offer slightly better rates.
Money Market Accounts
These typically offer higher interest than regular savings accounts while still providing some check-writing and debit access. Think of them as savings accounts with benefits.
4. Retirement Accounts
If you haven’t maxed out your retirement accounts, this might be the perfect opportunity.
For 2025, you can contribute:
- 401(k)/403(b)/457(b): $23,500 ($31,000 if you’re 50+, or up to $34,750 if you’re 60-63 with the new “super catch-up contribution”)
- IRA: $7,000 ($8,000 if you’re 50+)
The tax advantages of retirement accounts can significantly boost your long-term returns!
Sample Investment Allocations Based on Risk Tolerance
Not sure how to spread your $100k across different investments? Here are some sample allocations:
Conservative Investor
- 50% bonds (stable income, capital preservation)
- 25% CDs or high-yield savings (liquidity)
- 15% dividend-paying stocks (modest growth + income)
- 10% real estate/REITs (long-term diversification)
Moderate Investor
- 40% broad market index funds/ETFs
- 25% bonds
- 20% real estate investments
- 15% cash/short-term CDs
Aggressive Investor
- 60% diversified stocks/ETFs
- 20% small-cap or international stocks (higher growth potential)
- 15% real estate
- 5% cash (liquidity buffer)
Don’t Forget About Taxes!
This is where many investors mess up. Capital gains taxes can take a big bite out of your returns if you’re not careful.
Capital gains are split into two categories:
- Short-term: Investments held less than a year (taxed at your ordinary income rate, which can be as high as 37%)
- Long-term: Investments held more than a year (taxed at 0-20%, depending on your income)
Obviously, whenever possible, you want your investments to reach long-term status to save on taxes!
Should You Invest All $100k At Once?
This is a tough question that even professional investors debate. Many recommend dollar-cost averaging – investing your money in chunks over time rather than all at once.
For example, instead of investing all $100k today, you might invest $25k per quarter over the next year.
The advantage? If the market tanks right after you invest, you haven’t put all your money in at the peak. The disadvantage? If the market goes up, you’ve missed out on gains for the money sitting on the sidelines.
My Personal Take
If I had $100k to invest right now (a guy can dream!), I’d probably do something like this:
- Set aside 6 months of expenses in a high-yield savings account
- Pay off any credit card or high-interest debt
- Max out my retirement accounts for the year
- Put 50% of the remaining money in low-cost index funds
- Use 30% for real estate investments (probably a REIT to start)
- Keep 20% in cash/CDs while looking for special opportunities
But that’s just me! Your situation and goals are unique, and your investment strategy should reflect that.
Final Thoughts
Having $100k to invest is an amazing opportunity, but it also comes with responsibility. Take your time, do your research, and consider getting professional advice if you’re unsure.
Remember, investing is about playing the long game. While you might be focused on what to do with this money over the next year, the best results often come from thinking in terms of decades, not months.
What would you do with $100k to invest? I’d love to hear your thoughts in the comments below!
Max out retirement (and avoid the IRS while you’re at it)
Employer-sponsored retirement plans, such as a 401(k) or 403(b), and individual retirement accounts, such as Roth or traditional IRAs, can help shield tens of thousands of dollars from taxes. (Learn more about the differences between IRAs and 401(k)s.)
With $100,000 at your disposal, you can afford to max out both a 401(k) and an IRA if you’re eligible. The 401(k) contribution limit is $23,500 in 2025. People age 50 and older can contribute an extra $7,500 as a catch-up contribution. Due to the Secure 2.0 Act, those ages 60, 61, 62 and 63 get a higher catch-up contribution of $11,250. Combine that with an IRA or Roth IRA contribution limit of $7,000 in 2025 ($8,000 if age 50 and older). If you max both out, youre on your way to investing as much as possible for your future.
One note: You cant deposit a lump sum into a 401(k) — these accounts typically take contributions out of your paycheck. But you can drastically increase your contribution percentage for a few months, paying yourself back from the $100,000. (You can plunk the entire $7,000 into an IRA at once.)
» Ready to max out? Consult our picks for the best Roth IRAs
Decide how you want your money managed
Deciding how to invest $100,000 can be equally exciting and overwhelming, but you don’t have to go it alone. However, finding the right help depends on the type of advice you want, how much guidance you want, and how hands-on or hands-off you want to be.
- I’d like to manage the investment myself. It’s currently easier than ever to create, research and manage your own portfolio. To start, you’ll need a brokerage account (if you don’t already have one) in which to deposit your funds. You can then pick from various assets, such as stocks, bonds, mutual funds, ETFs and index funds. Just be sure you’re well-versed in diversification and risk tolerance if you go the DIY route. If this is for you, consult our picks of the best stock brokers.
- Id like to automate this process. Looking for a low-cost/low-hassle solution? Robo-advisors are a good option. These companies offer automated portfolio management for less than you’d pay a human to do the same thing. But many providers offer a human touch, where youll have access to financial advisors who can answer investing questions or customize your portfolio. Weve rounded up the best robo-advisors, depending on your needs.
- Im seeking full-service guidance. Suppose you want someone to make investment recommendations, manage your money and address other financial planning tasks on your list. In that case, consider hiring the next step up from a robo-advisor, an online financial advisor. These are less expensive than traditional financial advisors but offer a similar level of service. View our list of the best financial advisors.
I Don’t Know What to Do With My $100,000 in Savings
FAQ
Where should I invest $100K right now?
- 1. Stock Market (40-50%) Blue-chip stocks (Apple, Microsoft, Google) for stability. Growth stocks (AI, tech, EV sectors) for high returns.
- 2. Real Estate (20-30%) Buy rental property for passive income. Invest in REITs if you want real estate exposure without managing property.
- 3. Bonds & Fixed Income (10-15%)
How much interest will $100,000 make in a year?
Estimated annual interest on $100,000: At a 4.25% APY, you could earn approximately $4,250 per year.
How can I double my $100,000?
The classic approach to doubling your money is investing in a diversified portfolio of stocks and bonds, which is likely the best option for most investors. Investing to double your money can be done safely over several years, but there’s a greater risk of losing most or all your money when you’re impatient.
Where is the best place to deposit $100,000?
Stocks and shares ISAs are more flexible than pension products, as you can deposit and withdraw from your ISA numerous times in the year without it impacting your annual allowance. It could well prove to be the best way to invest 100k.