Hello Mustachians!
There is a thread with a similar title near the top right now but felt the need to create my own as the circumstances are vastly different. I am looking for advice concerning my small balance of student loans and if/how I should invest funds before interest accumulates.
Current loans:
$3,500 at 4.5%
$5,500 at 3.4%
As a new college grad, both of these loans are subsidized and therefore do not begin generating interest until my 'grace period' ends on 11/15/14. I do not have any other debt.
Without getting too much into the details, I have enough to pay off the loan right now without going completely broke (approx ~$15k in savings and investments). I'd like some advice on how to invest this money as I sit out the duration of my grace period. I'm assuming recommendations will be around low risk bond mutual funds (say VFSTX) or high yield savings accounts or maybe nothing at all. I'm open to hear everything.
Questions I'd like answered:
-- Where to invest (if at all) current savings that are waiting to pay off student loans?
-- Should I make minimum payments on my loans when they finally do begin accumulating interest? I know 3.4% or 4.5% are very reasonable interest rates. If so, how do you recommend investing?
-- Also, if I'm looking to save up $25,000-$30,000 for a house down payment in the next 1-2 years, where do you advise parking that money? I hate the idea of plugging it into a near zero interest rate savings account, but maybe that's the best option.