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 cash instead of splurging overly much on the holidays. Or you might be in a position 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 very question. Here are five areas the AI said to focus on.
Good To Know: How I Built a $1 Million Net Worth Through Smart Investing—And How You Can, Too
See More: 5 Low-Risk Accounts Proven To Grow Your Money Up to 13x Faster
1. High-Interest Debt
The typical annual percentage rate (APR) on credit cards hovers at around 22.8%, according to the Consumer Financial Protection Bureau, depending on factors like credit score. That’s much higher than, say, your standard auto or mortgage loan.
According to Investor.gov, no single investment will deliver guaranteed returns high enough to compensate for the high interest rate you’re paying on credit cards. If you’re trying to build wealth, these high-interest debts are just holding you back.
That’s why ChatGPT suggested paying down high-interest credit cards first. Just make sure you have a baseline emergency fund first.
2. 401(k) and IRA Accounts
Now, these are more of your standard retirement vehicles, though you might not have both a 401(k) and an individual retirement arrangement (IRA).
In 2026, the IRS set the maximum 401(k) contribution you can make at $24,500. If you’re an older worker in your 60s, you could also make catch-up contributions of up to $8,000. If your plan comes with an employer match, that’s extra money going straight toward building wealth.
The current IRA contribution limit is $7,500 or $8,600 if you’re 50 or older. If you’ve not yet reached that limit and have the funds, consider investing in this account. Know that any IRA contributions made before April 15, 2027 can count toward the previous year’s limit. This means you have a little extra time, though the longer you wait, the harder it’ll be to contribute next year. The 401(k) has no such provision, so if budget is tight, you may want to go at that one first before the new year.
3. Index Fund
A low-cost index fund can help your portfolio in two ways. It provides diversity, which mitigates some risk. It also helps you build financial security over the long term.
Index funds are designed to track a specific benchmark, like the S&P 500. You’re not picking individual stocks. Instead, you’re investing in a majority of the stocks or bonds the index tracks.
Take the Vanguard 500 Index Fund Admiral Shares (VFIAX) as an example. It tracks the S&P 500 Index. Since 2000, its average annual return has been 8.94%, correlating closely with the S&P 500's average annual return of 8.97%.
Of course, the sooner (and more consistently) you invest, the better your potential returns. Say you invest $500 between now and the end of 2026 in an index fund with an 8.94% average annual return. Say you also contribute $1,000 every year after this one for the next decade. Assuming similar returns, you’d be looking at:
$10,500 in total contributions
$5,826.67 in total interest earned
$16,326.67 end balance
Even that much is significant, but imagine if you contributed even more. You could see some serious gains.
4. High-Yield Savings Account (HYSA) or Certificate of Deposit (CD)
Your standard savings account might not even yield 1% APY. However, the FDIC lists the national rate cap on high-yield accounts at 4.38%. CDs, depending on their term, cap out at between 5% and 6% APY.
Not every financial institution offers the highest APYs on HYSAs and CDs. Still, putting your money in these types of accounts can help it grow more rapidly. Here’s an example of what $1,000 could look like after five years with no extra deposits:
Traditional savings account (0.5% APY): $1,025.25
HYSA (4% APY): $1,216.65
CD (6% APY): $1,338.23
Just know that, with a CD, your money will be off-limits to you until the account matures. If you try to withdraw it early, you could be penalized.
5. Year-End Tax Planning
ChatGPT suggested taking the time to do some year-end tax planning as well. Specifically, look over your asset allocation and any gains or losses. See if your portfolio needs rebalancing.
Depending on your situation, tax-loss harvesting might also be a viable option. A professional could help you with this, for a fee. Still, it could be worth it if they find legit deductions or other tax-saving measures.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice. It was created with the assistance of artificial intelligence and reviewed by our editorial team for accuracy. However, AI-generated content may be inaccurate, incomplete or outdated. You should independently verify important information through reliable sources before making any decisions based on this content.
More From MoneyLion:
