No to CDs or bonds, the interest rate is too low. Investments like those are for when you get into your mid 50's

An S&P 500 Index fund is your best bet. It's average return is historically 7% annually over any 40 year period. Even if you cashed out your Index fund that you had been paying into for 40 years in 2008 when the market was at it's lowest, you'd still have seen a 6% annual return. The fund in inherently diversified. The fees management fees are low for S&P 500 Index funds; like .5% low.

The people who said paying off debt are correct, but you can't afford to put off investing for retirement either. The one advantage you have over the crooks on Wall Street is compounding principal. The $500 you invest in year zero will double in 7 years to $1000 then double again over the next 7 year to $2000 then $4000. By the time you reach 40 you'll be seeing a 100% annual return on the money you invested in year 0.

You can't afford not to start investing for retirement as soon as possible and the S&P 500 Index Fund is the best vehicle for that.