You are doing all you can to afford this pricey four-year college experience. You’ve taken out loans, acquired a job and built a savings account. But with a cloud of student loan debt hanging over you — an average of more than $25,000 according to an Institute for College Access and Success report — you’re looking for a way to gain extra funds before graduation.

Why not invest?

“If you have extra money, you don’t want to just sit on it,” said Curtis Reynolds, assistant economics professor. “You should put it in something that’s going to get you some type of return. The critical question (is), how much risk do you want to take on?”

The top five investment options range from the risky— stock market — to the safe — a savings account.

The experts:

Curtis Reynolds, assistant economics professor

Diane Piros, financial adviser at Edward Jones in Stow

Erik Zemljic, economics lecturer

1. Stock market: Investing in a share of ownership in a company

– Zemljic: “You can (make money in stocks), but any money you make is based on luck and not skill.”

Zemljic said the stock market is highly competitive, and professional traders get the best stock prices first.

“There’s major players on Wall Street…playing with a lot of money,” he said. “These people will close it so quickly. It’s hard to outguess everyone else.”

He said a student must be prepared to lose money if he or she invests in stocks, but it can be done correctly.

“College students can afford to be kind of risky as long as they don’t panic and try to micromanage their investments and sell when the market is falling,” he said. “You have a lot of time to make up for any losses that might happen.”

– Piros: “Buying inexpensive stocks and holding on to them for the long term can really pay off. You have to be willing to hang in there and really go for the long term.” Piros also advised students to invest in environmental and reusable energy stocks.

2. Low-cost index fund: low-involvement investment in multiple stocks

– Zemljic: A low-cost index fund is a viable option for college students because it incurs lower fees and fewer risks. This fund invests the student’s stocks into multiple stocks equally, creating less chance of losing big if one company’s stock loses value.

“When you put money in there…[the fund managers are] going to buy all those stocks for you, but they’re not going to be trading,” Zemljic said. “They’re investing in equal proportions.”

Zemljic said a student looking for long-term investment could do so with an index fund like Vanguard 500.

“This is a way to invest it and forget it,” he said. “You’re buying into the stock market, not trying to pick stocks.”

– Piros: Index funds can be a good investment for a student, but it follows the market as a whole, which can be unpredictable.

“What the market does, that index fund (does),” Piros said. “Nobody watches the fund; they just go strictly on statistics. (But) it can be a relatively safe way to plunk some money down.”

3. Bonds: small returns over times

– Reynolds: Investing in bonds means lending money to government or a company, which will pay it back after a certain amount of time. Over the “life” of the bond, the investor receives increments of money through dividends and the full payment at the end. Reynolds said bonds are not as risky as index funds but it takes longer to see any returns.

– Piros: Student investors should look in to zero-coupon bonds, which do not require paying tax or an interest rate.

“It’s a nice way to not have to put as much in an investment, just kind of ignore it and it’s going to be there when you’re looking for your first home,” she said.

Piros said municipal bonds, which include university, hospital and utility bonds, are generally tax-exempt and “the safest of the safe.”

4. High-yield savings account and Certificate of Deposit: Locked accounts with higher interest rates

– Zemljic: A student looking for a short-term investment should choose a high-yield savings account, especially if he or she could not afford to lose any money in an investment. A high-yield or Certificate of Deposit acquires a higher interest rate than a basic savings account, but the student cannot withdraw funds for a set amount of time. A CD account is usually offered in 6-, 12-, 18- or 24-month increments.

– Piros: With CD interest rates around .01 to .02 percent, they wouldn’t make the student much money, “but they are insured and very, very safe.”

A student can open a CD with a bank or a financial firm. Banks usually charge a penalty for taking money out before the end of the cycle, but finance offices do not, Piros said. If you take money out of a CD before its end, you will receive it at the current market rate, which could be less than what it was initially at.

High-yield savings accounts pay you more interest but will be sold to more “junk bonds,” making riskier investments with your money, Piros said.

5. Savings account: Basic bank account with minimal interest rates

– Reynolds: A savings account has a low rate of return — meaning a low interest rate of usually 1/2 percent per year—but it’s the safest option. The Federal Deposit Insurance Corporation insures the first $100,000.

“Small increases over time build up to big numbers,” Reynolds said. Any investment option is “going to be worth it compared to not doing something (with the savings).”

– Piros: People often use basic savings accounts to open short-term CD accounts or to have an emergency fund.

“It’s better than under your bed,” she said. “How much you can make depends on the market and interest rates out there.”

And if you have an IRA from an old job, convert it to a Roth IRA. Take funds from an old Individual Retirement Account from a past summer job or other employment and transfer it to a Roth IRA, which will accumulate interest without the investor paying tax, Piros said.

“I think this is a strategy only students can use, because if you have some old money sitting somewhere, you can do this gradually over a period of years, not pay taxes, let it sit there and add to it later,” she said. “Even if you do nothing else and just let it grow, it’s a beautiful thing.”

A Roth IRA “grows” with dividends. If the investor needs to access the money before the end of the IRA cycle (usually when the investor is 59 ½ years old), he or she can extract the initial investment and leave the accumulated funds in it.

“It’s an opportunity most people don’t have because they’ve missed that magic window when they’re in their 20s,” Piros said. “Just remember it’s not a savings account for a trip to Mexico.”

Contact Kelli Fitzpatrick at [email protected].