I Asked ChatGPT About the Best Investments I Can Make During the Holidays
With only a few months left in 2026, you might be thinking about investing some extra money instead of spending too much during the holidays. Or you might have enough money to do both.
Either way, the question is: What are the best investments to make during the holiday season? To find out, MoneyLion asked ChatGPT this exact question. Here are five areas the AI suggested focusing on.
1. High-Interest Debt
The average yearly interest rate, called the annual percentage rate (APR), on credit cards is around 22.8%, according to the Consumer Financial Protection Bureau. The exact rate depends on things like your credit score. This rate is much higher than the interest rate on a typical car loan or home loan.
According to Investor.gov, no investment can promise returns high enough to make up for the high interest you pay on credit cards. If you're trying to build wealth, this expensive debt can hold you back.
That's why ChatGPT suggested paying off high-interest credit card debt first. Just make sure you have some emergency savings set aside before you do.
2. 401(k) and IRA Accounts
These are common ways to save for retirement, although you might have a 401(k), an individual retirement account (IRA), or just one of the two.
In 2026, the IRS set the maximum amount you can put into a 401(k) at $24,500. If you're an older worker in your 60s, you may also be able to make extra catch-up contributions of up to $8,000. If your employer matches some of your contributions, that means extra money goes toward your savings.
The current IRA contribution limit is $7,500, or $8,600 if you're 50 or older. If you haven't reached that limit and have money available, consider putting some into an IRA. Contributions made before April 15, 2027, can count toward the previous year's limit. This gives you a little more time to contribute for that year. However, waiting too long may make it harder to save enough for the following year. A 401(k) does not offer the same extra time, so if money is tight, you may want to focus on your 401(k) before the new year.
3. Index Fund
A low-cost index fund can help your investment portfolio in two ways. First, it spreads your money across many investments, which can lower some risks. Second, it can help you build financial security over time.
Index funds aim to follow a specific market measure, such as the S&P 500. Instead of choosing individual stocks yourself, you invest in a fund that holds many of the stocks or bonds included in that market measure.
One example is the Vanguard 500 Index Fund Admiral Shares (VFIAX). It follows the S&P 500 Index. Since 2000, its average yearly return has been 8.94%, close to the S&P 500's average yearly return of 8.97%.
Of course, investing earlier and adding money regularly can improve your chances of earning more over time. Imagine you invest $500 in an index fund between now and the end of 2026. The fund earns an average yearly return of 8.94%. You then add $1,000 every year for the next 10 years. If the fund earns similar returns, your results would look like this:
$10,500 in total contributions
$5,826.67 in total interest earned
$16,326.67 in total at the end
Even this amount can make a difference. If you add more money, your gains could be much larger.
4. High-Yield Savings Account (HYSA) or Certificate of Deposit (CD)
Your regular savings account might earn less than 1% APY. APY means annual percentage yield, or how much interest an account can earn in a year, including the effect of interest earning more interest. However, the FDIC lists the national rate cap for high-yield savings accounts at 4.38%. Depending on how long you leave your money in them, certificates of deposit (CDs) can offer APYs of up to 5% to 6%.
Not every bank or other financial company offers the highest rates on high-yield savings accounts or CDs. Still, these accounts can help your money grow faster. Here's how $1,000 could grow over five years without adding any more money:
Regular savings account (0.5% APY): $1,025.25
High-yield savings account (4% APY): $1,216.65
Certificate of deposit (6% APY): $1,338.23
Keep in mind that money in a CD is usually locked away until the account reaches its end date, known as its maturity date. If you take the money out early, you may have to pay a penalty.
5. Year-End Tax Planning
ChatGPT also suggested reviewing your taxes before the end of the year. Look at how your money is spread across different investments and check which investments have gained or lost value. See whether you need to adjust your portfolio to bring it back to your preferred mix of investments.
Depending on your situation, you might also benefit from tax-loss harvesting. This means selling investments that have lost value to help reduce your taxable gains. A professional can help you with this for a fee. The cost may be worth it if they find valid tax deductions or other ways to lower your tax bill.
This article was provided by MoneyLion.com for informational purposes only and should not be treated as financial, legal, or tax advice. It was created with help from artificial intelligence and reviewed by the editorial team for accuracy. However, AI-generated content may contain mistakes, leave out important details, or be out of date. Check important information with reliable sources before making decisions based on this article.