If you generally receive a large tax refund at the end of the year, your employer is probably withholding too much from your paycheck. Reduce your deductions and put the pay increase directly into an interest bearing account to help save towards your goal. Investment Selection For short-term goals, fixed rate investments are your best choice. These guarantee to pay a certain amount of interest on your deposit as long as you maintain your investment for the specified period of time. They are issued by the U.S. government and backed by its full faith and credit.
Treasury bills have a maturity of one year or less and are exempt from state and local taxes.
Money market accounts. Short-term debt securities, such as banker's acceptances, commercial paper, negotiable certificates of deposit, and Treasury Bills, with a maturity ranging from 30 days to one year. Inc. All rights reserved.