Where to Put Your Money During a Recession

Where to put money during a recession. Putting money in savings accounts, money market accounts, and CDs keeps your money safe in an FDIC-insured bank account (or NCUA-insured credit union account). Alternatively, invest in the stock market with a broker.

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Where is the safest place to put money during a recession? ›

Still, here are seven types of investments that could position your portfolio for resilience if recession is on your mind:

Defensive sector stocks and funds.
Dividend-paying large-cap stocks.
Government bonds and top-rated corporate bonds.
Treasury bonds.
Gold.
Real estate.
Cash and cash equivalents.

Nov 30, 2023

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What is the best thing to do with money in a recession? ›

5 Things to Invest in When a Recession Hits

Seek Out Core Sector Stocks. During a recession, you might be inclined to give up on stocks, but experts say it's best not to flee equities completely. ...
Focus on Reliable Dividend Stocks. ...
Consider Buying Real Estate. ...
Purchase Precious Metal Investments. ...
“Invest” in Yourself.

Dec 9, 2023

Where does the money go during a recession? ›

During recessions, one of the primary culprits responsible for money vanishing into thin air is the collapse of banks. As financial institutions crumble under the weight of bad loans and dwindling assets, they often go belly up, taking the money entrusted to them along for the ride.

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Are bank CDs safe during a recession? ›

If you're wondering where to put your money in a recession, consider a high-yield savings account, money market account, CD or bonds. They can provide safe places to store some of your savings.

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Is it better to have cash or money in bank during recession? ›

Generally, money kept in a bank account is safe—even during a recession. However, depending on factors such as your balance amount and the type of account, your money might not be completely protected.

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Is it better to have cash or property in a recession? ›

Yes, cash can be a good investment in the short term, since many recessions often don't last too long. Cash gives you a lot of options.

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What not to do during a recession? ›

Avoid becoming a co-signer on a loan, taking out an adjustable-rate mortgage (ARM), or taking on new debt. Don't quit your job if you aren't prepared for a long search for a new one. If you own your own business, consider postponing spending on capital improvements and taking on new debt until the recovery has begun.

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Will I lose all my money during a recession? ›

The economy will bounce back again. But here's the thing: Any losses you see on paper during a recession won't impact you unless you take the money out of your accounts. And if you do get scared and stop investing when things are shaky, then you'll never see the gains on those investments when the market gears back up.

What stocks do worst in a recession? ›

On the negative side, energy and infrastructure stocks have been the hardest-hit in recent recessions. Companies in these sectors are acutely sensitive to swings in demand. Financials stocks also can suffer during recessions because of a rising default rate and shrinking net interest margins.

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Should I take my money out of the bank before a recession? ›

Your money is safe in a bank, even during an economic decline like a recession. Up to $250,000 per depositor, per account ownership category, is protected by the FDIC or NCUA at a federally insured financial institution.

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Is it worth putting money in a CD right now? ›

CDs are worth investing in for risk-averse investors who want to keep their money safe while maintaining more of its purchasing power. Although you have to lock your money away for a specific amount of time, the payout from a long-term CD can be enticing. For example, Quontic offers a 5.05% APY on their six-month CD.

What is the biggest negative of putting your money in a CD? ›

Whenever you invest in a CD, you lock in the interest rate for the term. If inflation rises during the term, your APY won't be adjusted, so an interest rate that once seemed stellar might be lackluster after accounting for inflation.

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What is the best asset to hold during a recession? ›

Cash, large-cap stocks and gold can be good investments during a recession. Stocks that tend to fluctuate with the economy and cryptocurrencies can be unstable during a recession.

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Should you keep cash at home during a recession? ›

While volatile financial times (inflation, recessions, and fluctuations in supply and demand) may cause some to feel as though the best place to store their money is under the mattress: it is not a recommended practice now, or at any other time.

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How do you not lose money in a recession? ›

Build up your emergency fund, pay off your high interest debt, do what you can to live within your means, diversify your investments, invest for the long term, be honest with yourself about your risk tolerance, and keep an eye on your credit score.

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Where to Put Your Money During a Recession | The Motley Fool (2024)

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Where to Put Your Money During a Recession | The Motley Fool? ›

What stocks do worst in a recession? ›

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