
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, May 14, 1990                   TAG: 9005140350
SECTION: BUSINESS                    PAGE:    EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Short

MONEY MATTERS

Q: I would like to make a $5,000 tax deferred investment that would be safe and pay the highest interest rate over a period of five to 10 years.

A: Congress, alas, has left us few tax deferred shelters outside of 401(k), Keogh and other job-related retirement plans. You should be investing in them if they are available to you at work.

Some partnerships offer tax deferments, but they are not safe for the average investor.

You can shelter $2,000 of the money inside an IRA, but not the full amount in one year.

Annuities and some insurance policies provide tax deferrals. If you need the money in five or so years, however, these programs are not for you because of high initial charges and withdrawal fees.

A stock mutual fund might be your answer because shares should be held for a period of several years. You would be taxed on the dividends, but not on your capital gain until you sell.

Or you might consider a tax-fee investment in a high-grade municipal bond fund. You will never be taxed on your earnings, although the interest rate will be lowered accordingly.

by CNB