Investing / Strategy

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A high return is what every investor is after, but it’s not the only factor that matters. When reviewing investments, professionals look not only at absolute return potential but also something called “risk-adjusted return.” The bottom line is that not all returns are created equal, and smart investors look to invest where they’re getting the best value for the risk that they are taking on — even if that means accepting lower returns.

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Through that lens, you might prefer an investment that pays just 2% a year over one that’s returning 20%. Why? Because if that 2% return is guaranteed, such as via a U.S. Treasury, but the path to the 20% return involves the risk of losing 40%, that steady 2% could be a better value over time, based on its low risks — especially for a risk-averse investor.

For the individual investor, this balance is all the more important. If you understand how comparing investments requires looking at both returns and the risk with equal weight, you can understand how even a tiny return can be a great deal if the investment is really risk-free.

9 Safe Investments With High Returns

Here’s a closer look at some of the safest investments with the highest returns. You’re unlikely to generate exponential growth with these, but you’re even less likely to lose the money you’re relying on to keep you and your family secure.

1. High-Yield Savings Accounts

The high-yield savings account is pretty much the gold standard of safe investments, offering you strong returns given the total absence of risk. The money you have stashed in almost any bank is insured by the Federal Deposit Insurance Corporation, meaning the government will make you whole on any losses up to $,

Changing Rates

One of the few catches with high-yield savings accounts is that the rate can change in response to current market conditions. When rates are falling, as they have been the past few years, payouts can seem not as attractive.

Currently, top high-yield savings accounts pay a range of interest rates, from %%, which is a far cry from the 2%-plus of just a few years ago. However, with the national average savings rate hovering at just % as of Jan. 18, high-yield savings accounts are still a great deal.

Although perhaps not as exciting as potential stock market returns, high-yield savings accounts are very liquid investments, meaning it’s easy to access without penalty if you need it quickly. That makes stashing your emergency fund — something you better have if you’re really looking to limit your financial risk — a pretty decent investment under the circumstances.

Bottom Line: Federal Deposit Insurance Corp. insurance means your money is % safe. It’s easy to get a hold of in a pinch, and rates are well above the national average savings account rate.

Best For: Stashing your emergency fund; investors looking for options without any risks

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2. Certificates of Deposit

Certificates of deposit are almost identical to savings accounts. Most are FDIC insured and so there’s zero risk involved. However, they are still liquid.

With a CD, you accept a time horizon when you invest — usually anywhere from one month to up to 10 years. Although a few CDs allow you to withdraw the money early without consequence, you generally must pay a penalty if you access your cash before the CD term ends. On the one hand, that makes CDs much less valuable for your emergency fund or savings.

On the other, it should mean you’ll get paid a higher rate of return in exchange for that loss of easy access. Basically, banks will have an easier time reinvesting your savings if you’ve promised to leave them alone for a set amount of time. In return, you should be getting a better rate.

Before you get a CD, consider the following:

1. Whether or not you might need that money before the CD’s maturation date. If the answer is yes, you’ll want to look elsewhere.
2. Whether you really are getting a better interest rate than is available with high-yield savings accounts. Your only advantage with a CD over a savings account is getting better returns, so if you can find a savings account that pays better than the CD at your banks, there’s just no point.

That said, an FDIC-insured CD’s returns might seem modest, but they’re pretty stellar in the context of the near-total absence of any risk to you of losing money.

Bottom Line: CDs should offer higher returns than most savings accounts, but that comes at a loss of flexibility as you’ll owe a penalty for pulling your money out early.

Best For: Money you can be sure you won’t need for the prescribed time frame; investors with a stable financial picture looking to avoid any risk in their investments

3. Money Market Accounts

Money market accounts operate on similar principles to the CD or savings account. They usually offer better rates than savings accounts, but they also come with more liquidity and might even let you write checks or use a debit card with the account, allowing for greater flexibility when used alongside a savings account.

If you’re using the account just to make deposits and write a monthly rent check, for instance, the MMA could be ideal. However, it has everything to do with the return, so shop around and compare the options not just with other money market accounts but with CDs and high-yield savings accounts as well.

Also, note that the main caveat with a money market account is that you’re limited by law to six transactions a month. Exceed that and you’ll be fined; keep exceeding it and the bank will have to convert your account to a checking account, or perhaps even close your account.

Bottom Line: Money market accounts are very similar to savings accounts but offer the option to write a limited number of checks each month.

Best For: Money you might need to use infrequently; investors looking for a little more flexibility than their savings account offers

Good To Know

The FDIC insurance limit of $, is applied per bank, per person — not for each account. So, if you have a savings account, CD and MMA at the same bank that have a combined $, in them, you’re not insured on $50, of that money.

4. Treasury Bonds

Even though a % return on a high-yield savings account is more than you’re likely to get at your bank, you will probably need at least some investments that are taking a bit more risk if you want to build a strong portfolio. The next tier up from banking products in terms of higher risk and higher returns are bonds, which are essentially structured loans made to a large organization

Treasury bonds, also known as T-bonds, are guaranteed by the full faith and credit of the U.S. government depending on how long they take to mature. On your end, treasuries will act just like a CD in many ways. Here’s how it works:

• You invest with a set interest rate and a date of maturity anywhere from one month to 30 years from when you buy the bond.
• You’ll get regular “coupon” payments for the interest while you hold it and then your principal is returned when the bond matures.

While your coupon payments are completely predictable and secure, the face value of your bonds will rise and fall over time based on the prevailing interest rates, stock market performance and any number of other factors. Granted, that could work out in your favor, but only because you’ve taken on additional risk. So, if you aren’t reasonably certain you can hold the bond to maturity, they’re definitely a riskier investment.

Keep in Mind

Unlike a CD, you can’t pull out your money before the maturity date, not even for a penalty. That doesn’t mean you’re stuck — you can easily go out and sell the bond on the secondary market. But at that point, you’ve gone from buying and holding treasuries to maturity, which tends to be incredibly safe, to trading bonds — vastly less safe. 

Bottom Line: Debt issued by the Treasury is backed by the full faith and credit of the U.S. government, making it similarly as free from risk as FDIC-insured bank accounts.

Best For: Money you know you won’t need prior to the maturity date of the bond; funds in excess of the $, insured by the FDIC; investors willing to give up some flexibility in search of slightly better returns

5. Treasury Inflation-Protected Securities

Many people turn to Treasury Inflation-Protected Securities, or TIPS, in response to inflation. Your interest payments are going to be considerably lower than what you would earn on a normal treasury of the same length. However, you’re accepting that lower rate because your principal will increase, or decrease, in value to match inflation as measured by the Consumer Price Index. If inflation suddenly spikes to 5%, anyone with TIPS is sitting pretty while people who bought bonds at a fixed 2% rate are basically losing 3% a year.

Like any other treasuries, you expose yourself to all sorts of additional risk if you have to sell them before they mature, so you should make sure you won’t need to access that money prior to maturity.

Bottom Line: TIPS offer lower yields, but the principle will increase or decrease in value based on the prevailing inflation rates while you hold the bond.

Best For: Money you know you won’t need prior to the maturity date of the bond; funds in excess of the $, insured by the FDIC; investors looking for treasuries but interested in removing inflation-based risk from their portfolio

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6. Municipal Bonds

Municipal bonds, which are issued by state and local governments, are a good option for slightly better returns with only slightly more risk. There’s almost no chance the U.S. government defaults, but there are definitely cases of major cities filing for bankruptcy and losing their bondholders a lot of money.

But most people are probably aware that a bankruptcy by a major city is pretty rare — though if you want to be extra safe you could steer clear of any cities or states with large, unfunded pension liabilities.

And because the federal government has a vested interest in keeping borrowing costs low for state and local governments, it has made interest earned on munis tax-exempt at the federal level. In some cases, munis are except from state and local taxes as well. So not only are they usually still safe, but they come with the added bonus of reducing your tax bill when compared with many other options.

Bottom Line: These debts issued by state and local governments are a little riskier than treasuries but come with the bonus of being untaxed at the federal level.

Best For: Taking on marginally more risk in pursuit of marginally better returns; investing while also keeping your tax bill as low as possible; investors looking for relatively safe bonds

7. Corporate Bonds

Like governments of various sizes, corporations will also issue debt by way of selling bonds. Like munis, this can mean you’re still in safe territory, but it’s also no sure bet. Plenty of corporations that are teetering on the edge of solvency will offer high yields for the high risk — usually referred to as “junk bonds” — and those aren’t a great call if you’re looking for something really safe.

Although corporate bonds are inherently riskier than treasuries and often riskier than munis, if you’re sticking to major, blue-chip public companies and holding the bonds to maturity, they’re still in the realm of being very safe.

Fortunately, you’re not left to guess how financially sound a company is. Public companies regularly issue financial reports detailing assets, liabilities and income, so you can get a clear sense of where it stands.

And if you, like most people, don’t really know your way around a balance sheet or income statement, you can rely on rating agencies like Moody’s or S&P Global Ratings. In most cases, an AAA-rated bond represents minimal risks if you hold it to maturity.

Bottom Line: These debts issued by corporations are just a bit riskier than munis, but usually offer just a bit more interest income.

Best For: A measured increase in your portfolio’s risk to improve returns; investors looking to diversify their bond holdings

8. S&P Index Fund/ETF

Stock markets can be incredibly volatile, and on any given day you might gain or lose a big chunk of your investment. And given that a GOBankingRates survey of non-investors found that the primary factor keeping more people from buying stocks is a lack of funds to commit, it’s hard for many families to put at risk money they only freed up for saving by making major sacrifices elsewhere.

Diversifying Your Portfolio

Using index funds or exchange-traded funds can build diversification into your portfolio. Any one company can befall a disaster, but if you own shares of a fund holding stock of different companies, you’re spreading that risk out by a lot. All the better if you’re getting shares in large, stable companies that are known as “blue-chip stocks” in investing parlance.

One company might sink due to a disaster, but a few hundred at the same time? It’s highly unlikely.

Owning Stocks for the Long Term

Another strategy is to defray much of the risk of stock investments is to own stocks for a very, very long time. While stock markets are incredibly chaotic over any one week, month or even year, they actually become remarkably predictable when you start to look at them in terms of decades.

Over its history, the S&P has returned roughly 10% a year. And although there have been years where stocks plunged 30% or even 40%, the markets have always rebounded over the following years.

Good To Know

If you had owned an S&P ETF during the financial crisis, your investment would have lost almost half its value in just a few months, but over the next eight years, your investment would have averaged 18% per year. So, if you’re treating stock investments as being illiquid and only investing money you can be confident you won’t need to tap into for a few years, you’ll have the flexibility to wait out a nasty downturn in the economy and recover.

Why Choose the S&P Index?

The S&P is one of the most popular options for index investments. The index includes almost all blue-chip stocks, and has that long history of returning roughly 10% a year — an incredible return for how little risk is involved over a long time frame. You might also consider the Russell , which is made up of the 1, most valuable American companies — giving you double the diversification.

Bottom Line: Stocks are riskier than bonds, but by purchasing large funds that represent hundreds of stocks and holding them for very long time periods, you can mitigate much of that risk and enjoy strong returns compared with bonds.

Best For:Long-term investments you won’t be cashing in for years or even decades; younger investors with plenty of time to be patient with the fluctuating markets; investors interested in growing their money at a faster rate than bonds and banking products can provide

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9. Dividend Stocks

Dividend stocks present some especially strong options for a few reasons. A dividend is a regular cash payment issued to shareholders — really the most direct way a stock can direct business success back to its investors. It also, typically, means some important things for the risk profile of that stock.

Here are some factors to consider when assessing a stock’s risk:

1. That dividend is much more consistent and gets paid out whether the stock is up or down. Even if your stock is underperforming in terms of its share value, you’re still getting something back, making it easier to hold onto the stock and wait out a downswing.
2. The dividend acts as something of a bulwark against falling share prices. Dividends are set as a per-share payment, but investors typically focus on the “dividend yield,” which is the percentage of a company’s share price that will be returned as dividends in a given year. As stock prices fall, you’re paying less for that same dividend.
3. The higher that yield gets, the harder it’s going to be for bargain-hunting dividend investors to pass it up. That’s not going to mean much for a company that’s obviously headed for bankruptcy — a bad investment regardless of the dividend yield — but it will help prop up the share price for a company that’s just going through some tough times.

Companies can and will slash their dividends in times of extreme hardship. It’s rare, as it usually results in the stock plunging — consistency is what people like about dividends, so they tend to react very poorly when a dividend appears less secure — but dividend payments are less secure than the coupon payment on a bond, for example, which is fixed.

That said, if you shop around for companies that not only offer a strong yield but have a long track record of consistently increasing their dividend on a regular basis — sometimes referred to as “dividend aristocrats” — you can mitigate a lot of that risk.

Bottom Line: Owning stock in an individual company is much riskier than the other options, but dividend stocks will provide a steady return whether markets are up or down.

Best For: Long-term investments that still produce passive income; investors looking to invest in order to create a regular income stream; younger investors reinvesting dividends to maximize growth

How Safe Investments With High Returns Compare

The ideal portfolio is one with both minimal risk and maximum returns. There’s always some compromise necessary to find the right balance. Although the relative certainty provided by your savings account is great, the returns it will provide aren’t quite enough on their own to really build wealth.

Likewise, while the returns provided by an S&P fund are much better over the long run, it’s important to look at them in the context of the risk that you must accept — most notably, the risk of double-digit percentage losses over the short-term — that insured banking products just don’t have.

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Daria Uhlig, Cynthia Measom and John Csiszar contributed to the reporting for this article.

Money that is considered savings is often put into an interest-earning account where the risk of losing your deposit is very low. Although you may be able to reap larger returns with higher-risk investments such as stocks, the idea behind savings is to allow the money to grow slowly with little or no associated risk. Online banking has expanded the variety and accessibility of savings accounts.

If you're not earning any interest on your savings, your savings will be worth less over time due to inflation. Here are some of the different types of accounts so you can make the most of your savings.

1. Savings Accounts

Banks and credit unions (cooperative financial institutions that members—often employees at a particular company or members of a trade or work association—create, own, and manage) offer savings accounts. The money in a savings account is insured by the Federal Deposit Insurance Corporation (FDIC) up to certain limits. Restrictions may apply to savings accounts; for example, a service fee may be charged if more than the permitted number of monthly transactions occurs.

Money in a savings account typically cannot be withdrawn through check writing and—occasionally—cannot be withdrawn from an ATM. Interest rates for savings accounts are characteristically low, but online banking does provide slightly higher-yielding savings accounts. 

2. High-Yield Savings Accounts

High-yield savings accounts are a type of savings account, complete with FDIC protection, which earn a higher interest rate than a standard savings account. The reason that it earns more money is that it usually requires a larger initial deposit, and access to the account is limited. Many banks offer this type of account to valued customers who already have other accounts with the bank.

Online high-yield bank accounts are available, but you will need to set up transfers from another bank to deposit or withdraw funds from the online bank. It's worth learning how to find and open these accounts. And make sure to shop around for the best high-yield savings account rates to ensure you're maximizing your savings.

3. Certificates of Deposit (CDs) 

Certificates of deposit (CDs) are available through most banks and credit unions. Like savings accounts, CDs are FDIC-insured, but they generally offer a higher interest rate, especially with larger and longer deposits. The catch with a CD is that you will have to keep the money in the CD for a specified amount of time; otherwise, a penalty, such as losing three months’ interest, will be assessed.

Popular CD maturity periods are six months, one year, and five years. Any earned interest can be added to the CD if and when the CD matures and is renewed. A CD ladder allows you to stagger your investments and take advantage of higher interest rates. As with savings accounts, shop around for the best rates on CDs.

4. Money Market Funds

A money market mutual fund is a type of mutual fund that invests only in low-risk securities. As a result, money market funds are considered one of the lowest-risk types of funds. Money market funds typically provide a return similar to those of short-term interest rates. Mutual funds, brokerage firms, and many banks offer money market funds. Interest rates are not guaranteed, so a bit of research can help find a money market fund that has a history of good performance.

5. Money Market Deposit Accounts

Money market deposit accounts are offered by banks and typically require a minimum initial deposit and balance, with a limited number of monthly transactions. Unlike money market funds, money market deposit accounts are FDIC-insured. Penalties may be assessed if the required minimum balance is not maintained, or if the maximum number of monthly transactions is surpassed. The accounts typically offer lower interest rates than certificates of deposit do, but the cash is more accessible. 

6. Treasury Bills and Notes

U.S. government bills or notes—often referred to as treasuries—are backed by the full faith and credit of the U.S. government, making them one of the safest investments in the world. Treasuries are exempt from state and local taxes and are available at different maturity lengths. Bills are sold at a discount; when the bill matures, it will be worth its full face value. The difference between the purchase price and the face value is the interest. For example, a $1, bill might be purchased for $; at maturity, it will be worth the full $1,

Treasury notes, on the other hand, are issued with maturities of two, three, five, seven, and 10 years, and earn a fixed interest rate every six months. In addition to the interest, the T-notes can be cashed in for the face value at maturity if purchased at a discount. Both Treasury bills and notes are available at a minimum purchase of $ 

7. Bonds

A bond is a low-risk debt investment, similar to an IOU, which is issued by companies, municipalities, states, and governments to fund projects. When you purchase a bond, you are lending money to one of these entities (known as the issuer). In exchange for the “loan,” the bond issuer pays interest for the life of the bond and returns the face value of the bond at maturity. Bonds are issued for a specific period at a fixed interest rate.

Each of these bond types involves varying degrees of risk, as well as returns and maturity periods. Also, penalties may be assessed for early withdrawal and commissions may be required. Note that, depending on the type of bond, it may carry additional risk, as with corporate bonds, wherein a company could go bankrupt. 

The Bottom Line

Savings accounts allow you to squirrel away money while earning modest, low-risk returns. Due to the large variety of savings vehicles, a little research can go a long way in determining which will work hardest for you. It is important to do your homework before committing your money to a particular savings account so you can make the most of your savings.

High-return investments are synonymous with high risk. Taking the chance on high returns also means you could easily lose most, if not all, of your invested money. 

It’s important to match your risk profile with the company and product you’re considering.  Investment options are truly limitless, and it can be difficult to figure out where to put your money. A comprehensive risk and goal assessment can help you narrow your options. 

To get you started, Benzinga’s put together a list of 10 high-return investments — with low, medium and high-risk options you can review. High-risk investments offer incredible potential, but you should remember that could also lose your money. Budgeting, researching, and preparing are almost more important than the investment itself.

3 Low-Risk Investments

Ready to tackle some low-risk investments? Here are 3 great options. 

U.S. Savings Bonds

U.S. savings bonds are one of the lowest risk investment types. These securities are issued by the U.S. Treasury and you provide a loan to help the government fund operations. Savings bonds offer a fixed interest rate paid by the government over a specific period of time.

Savings bonds come in 2 types:

• Series EE Bonds earn a fixed interest rate for up to 30 years. This interest is set biannually, so you know how much interest the bonds will accrue over the lifetime before you buy. These securities are sold at face value, so a $ investment nets you a $ U.S. savings bond. Series EE bonds are long-term investments, and you will be penalized for redeeming them early.
• Series I Bonds earn interest based on a combination of the inflation rate and fixed rate. A fixed rate is set once you buy the bonds while the inflation rate is adjusted every 6 months. Cashing out Series I bonds before their 5-year maturity period results in a penalty.

Savings Accounts

A savings account is among the few safe investments with high returns — you can earn interest for every dollar stashed outside bonds and stocks. Unlike other investment options, savings accounts are incredibly liquid, so you can access your cash when you need it.

Certificates of Deposit (CDs)

Certificates of deposits (CDs) are a great low-risk, long-term investment option. A CD account is available at your credit union or bank, and just like a savings account, you can earn interest on money deposited. You’ll earn an interest rate premium in exchange for leaving your deposit untouched for a set period — this could be 6 months or 5 years. Long-term CD accounts pay more than shorter-term ones. If you cash out before the maturity date, you will pay an early withdrawal penalty.

4 Medium Risk Investments

Look into some medium-risk investments if you want higher returns.

Invest in High Dividend Stocks

Dividends are a form of profit-sharing through which a corporation makes regular payments to its shareholders. The payment of dividends isn’t required by law, but corporations choose to pay stockholders a share of the money earned through a reinvestment plan or as a cash option. 

High-dividend stock investing can be risky if you don’t know what to look for. Always consider large corporations with a long history of low volatility and financial stability. This means it probably has enough capital stored to deal with market fluctuations.

After identifying a dividend-paying stock, you can buy directly through the company or through a brokerage. Buying directly through the company requires you to make a minimum investment of $25 to $ A brokerage requires no minimum investment amount.

TradeStation, E*TRADE and TD Ameritrade are great brokerages for high dividend stock investing. All charge no commissions on trades.

Invest in REITs

Real Estate Investment Trusts (REITs) are the best way to spend money in the real estate market without investing thousands as a property owner. A REIT not only provides above-average dividends but also gives solid returns over time as property values rise. 

Start with research for REITs that purchase property in an area of interest. Most REITs are registered with the SEC and listed on public exchanges. These are referred to as publicly-traded REITs. Private REITs are exempt from SEC registration and aren’t listed on public exchanges. Diversyfund is an excellent private REIT to help you build a diversified portfolio while you hedge against market volatility.

Invest in Crowdfunding Real Estate

Real estate crowdfunding allows you to pool your money together to invest in properties. When a developer identifies an investment opportunity, he or she might not have the ability to fund the investment entirely, so contribute some capital to execute your plan. You don’t need a large amount of money to join a crowdfunding deal.

Crowdfunding real estate has 3 players — a sponsor who identifies, plans and oversees the entire investment, a crowdfunding platform where the sponsor rallies investors and capital and an investor who contributes capital in exchange for a portion of profits accrued by the deal.

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Best investment plans in India

Here are a few types of investments that you can choose to park your money in.

• Stocks
  Stocks represent a share of ownership in a company or an entity. Stocks are one of the best investment avenues for long-term investors to earn generous returns. However, since these are market-linked instruments, there is always the risk of capital loss.
  

• Fixed deposit
  Fixed deposit is an ideal investment tool for risk-averse investors. An FD bears no effect of the market movements while offering secured returns on your deposit. Even investors with high-risk appetites choose to invest in FDs to stabilise their portfolios.

• Mutual funds
  Mutual funds are investment tools managed by fund managers which pool people’s money and invest in stocks and bonds of different companies to yield returns. You can earn generous returns even when starting with a smaller initial deposit amount.

• Senior citizen savings scheme
  Senior Citizen Savings Scheme is a long-term saving option for retirees. This option is ideal for those who aim to create a steady and secure income stream post-retirement.

• Public provident fund
  PPF is a trusted investment plan in India. Investments start at just Rs. per annum and the principal invested, interest earned, and maturity amount are all exempt from tax. It has a lock-in period of 15 years, with partial withdrawals allowed at various points.

Where should you invest your money

Depending on your risk appetite, you can choose to invest in either market-linked instruments or those that remain unaffected by the market movements. Market-linked investments yield higher returns, but these are not always the best investment plans as they come with the risk of losing your capital. In comparison, investment tools like fixed deposits offer more security of funds. Bajaj Finance is one such financier that provides the dual benefit of high FD rates and safety of funds.

How risk appetite affects your investment choices

Most investments carry a certain level of volatility, and usually, the returns on an investment are more when the levels of risk are high. Thus, investment decisions are often taken based on investors’ risk appetite.

Low-risk investments: Fixed-income instruments include bonds, debentures, fixed deposit schemes, and government savings schemes.

Medium-risk investments: Debt funds, balanced mutual funds, and index funds fall in this category.

High-risk investments: Volatile investments include instruments like stocks and equity mutual funds.

Why is the Bajaj Finance FD one of the best investment options

• High interest rates up to % p.a.
• Highest safety ratings of FAAA by CRISIL and MAAA by ICRA
• Periodic payout options with a Non-cumulative FD
• Loan against FD to avoid premature withdrawals

Investing in a Bajaj Finance FD is now easier than ever. Start your investment journey from the comfort of your home with our end-to-end online investment process.

With the economy facing high inflation, the Federal Reserve ready to raise interest rates and rising tension from the conflict in Ukraine, is shaping up to be a bumpy ride for investors. So it&#x;s crucial that investors stay disciplined. Building a portfolio that has at least some less-risky assets can be useful in helping you ride out volatility in the market.

The trade-off, of course, high interest earning investments, is that in lowering risk exposure, investors are likely to earn lower returns over the long run. That may be fine if your goal is to preserve capital and maintain a steady flow of interest income.

But if you&#x;re looking for growth, consider investing strategies that match your long-term goals. Even higher-risk investments such as stocks have segments (such as dividend stocks) that reduce relative risk while still providing attractive long-term returns.

What to consider

Depending on how much risk you&#x;re willing to take, there are a couple of scenarios that could play out:

• No risk &#x; You&#x;ll never lose a cent of your principal.
• Some risk &#x; It&#x;s reasonable to say you&#x;ll either break even or incur a small loss over time.

There are, however, two catches: Low-risk investments earn lower returns than you could find elsewhere with risk; and inflation can erode the purchasing power of money stashed in low-risk investments.

If you opt for only low-risk investments, you&#x;re likely to lose purchasing power over time. It&#x;s also why low-risk plays make for better short-term investments or a stash for your emergency fund. In contrast, higher-risk investments are better suited for higher long-term returns.

Here are the best low-risk investments in March

1. High-yield savings accounts
2. Series I savings bonds
3. Short-term certificates of deposit
4. Money market funds
5. Treasury bills, notes, bonds and TIPS
6. Corporate bonds
7. Dividend-paying stocks
8. Preferred stocks
9. Money market accounts
10. Fixed annuities

Overview: Best low-risk investments in

1. High-yield savings accounts

While not technically an investment, savings accounts offer a modest return on your money. You&#x;ll find the highest-yielding options by searching online, and you can get a bit more yield if you&#x;re willing to check out the rate tables and shop around.

Why invest: A savings account is completely safe in the sense that you&#x;ll never lose money. Most accounts are government-insured up to $, per account type per bank, so you&#x;ll be compensated even if the financial institution fails.

Risk: Cash doesn&#x;t lose dollar value, though inflation can erode its purchasing power.

2. Series I savings bonds

A Series I savings bond is a low-risk bond that adjusts for inflation, helping protect your investment. When inflation rises, the bond&#x;s interest rate is adjusted upward. But when inflation falls, the bond&#x;s payment falls as well. You can buy the Series I bond from www.oldyorkcellars.com, which is operated by the U.S. Department of the Treasury.

The I bond is a good choice for protection against inflation because you get a fixed rate and an inflation rate added to that every six months, says McKayla Braden, former senior advisor for the Department of the Treasury, referring to an inflation premium that&#x;s revised twice a year.

Why invest: The Series I bond adjusts its payment semi-annually depending on the inflation rate. With the high inflation levels seen inthe bond is paying out a sizable yield. That will adjust higher if inflation rises, too, high interest earning investments. So the bond helps protect your investment against the ravages of increasing prices.

Risk: Savings bonds are backed by the U.S, high interest earning investments. government, so they&#x;re considered about as safe as an investment comes. However, don&#x;t forget that the bond&#x;s interest payment will fall if and when inflation settles back down.

If a U.S. savings bond is redeemed before five years, a penalty of the last three months&#x; interest is charged.

3. Short-term certificates of deposit

Bank CDs are always loss-proof in an FDIC-backed account, unless you take the money out early. To find the best rates, you&#x;ll want to shop around online and compare what banks offer. With interest rates slated to rise init may make sense to own short-term CDs and then reinvest as rates move up. You&#x;ll want to avoid being bitcoin investir good into below-market CDs for too long.

An alternative to a short-term CD is a no-penalty CD, which lets you dodge the typical penalty for early withdrawal. So you can withdraw your money and then move it into a higher-paying CD without the usual costs.

Why invest: If you leave the CD intact until the term ends the bank promises to pay you a set rate of interest over the specified term.

Some savings accounts pay higher rates of interest than some CDs, but those so-called high-yield accounts may require a large deposit.

Risk: If you remove funds from a CD early, you&#x;ll usually lose some of the interest you earned. Some banks also hit you with a loss of a portion of principal as well, so it&#x;s important to read the rules and check rates before you purchase a CD. Additionally, if you lock yourself into a longer-term CD and overall rates rise, you&#x;ll be earning a lower yield. To get a market rate, you&#x;ll need to cancel the CD and will typically have to pay a penalty to do so.

4. Money market funds

Money market funds are pools of CDs, short-term bonds and other low-risk investments grouped how much was bitcoin in july 2022 to diversify risk, and are typically sold by brokerage firms and mutual fund companies.

Why invest: Unlike a CD, a money market fund is liquid, which means you typically can take out your funds at any time without being penalized.

Risk: Money market funds usually are pretty safe, says Ben Wacek, founder and financial planner of Guide Financial Planning in Minneapolis.

The bank tells you what rate you&#x;ll get, and its goal is that the value per share won&#x;t be less high interest earning investments $1, he says.

5. Treasury bills, high interest earning investments, notes, bonds and High interest earning investments U.S. Treasury also issues Treasury bills, Treasury notes, Treasury bonds and Treasury inflation-protected securities, or TIPS:

• Treasury bills mature in one year or sooner.
• Treasury notes stretch out up to 10 years.
• Treasury bonds mature up to 30 years.
• TIPS are securities whose principal value goes up or down depending on the direction of inflation.

Why invest: All of these are highly liquid securities that can be bought and sold either directly or through mutual funds.

Risk:If you keep Treasurys until they mature, high interest earning investments, you generally won&#x;t lose any money, unless you buy a negative-yielding bond, high interest earning investments. If you sell them sooner than maturity, high interest earning investments, you could lose some of your principal, since the value will fluctuate as interest rates rise and fall. Rising interest rates make the value of existing bonds fall, and vice versa.

6. Corporate bonds

Companies also issue bonds, which can come in relatively low-risk varieties (issued by large profitable companies) down to very risky ones. The lowest of the low are known as high-yield bonds or junk bonds.

There are high-yield corporate bonds that are low rate, high interest earning investments, low quality, says Cheryl Krueger, founder of Growing Fortunes Financial Partners in Schaumburg, Illinois. I consider those more risky because you have not just the interest rate risk, but the default risk as well.

• Interest-rate risk: The market value of a bond can fluctuate as interest rates change. Bond values move up when rates fall and bond values move down when rates rise.
• Default risk: The company could fail to make good on its promise to make the interest and principal payments, potentially leaving you with nothing on the investment.

Why invest: To mitigate interest-rate risk, investors can select bonds that mature in the next few years. Longer-term bonds are more sensitive to changes in interest rates. To lower default risk, investors can select high-quality bonds from reputable large companies, or buy funds that invest high interest earning investments a diversified portfolio of these bonds.

Risk: Bonds are generally thought to be lower risk than stocks, though neither asset class is risk-free.

Bondholders are higher in the pecking order than stockholders, so if the company goes bankrupt, high interest earning investments, bondholders get their money back before stockholders, Wacek says.

7. Dividend-paying stocks

Stocks aren&#x;t as safe as cash, high interest earning investments, savings accounts or government debt, but they&#x;re generally less risky than high-fliers like options or futures. Dividend stocks are considered safer than high-growth stocks, because they pay cash dividends, helping to limit their volatility but not eliminating it. So dividend stocks will fluctuate with the market but may not fall as far when the market is depressed.

Why invest: Stocks that pay dividends are generally perceived as less risky than those that don&#x;t.

I wouldn&#x;t say a dividend-paying stock is a low-risk investment because there were dividend-paying stocks that lost 20 percent or 30 percent in , Wacek says. But in general, high interest earning investments, it&#x;s lower risk than a growth stock.

That&#x;s because dividend-paying companies tend to be more stable and mature, and they offer the dividend, high interest earning investments, as well as the possibility of stock-price appreciation.

You&#x;re not depending on only the value of that stock, which can fluctuate, but you&#x;re getting paid a regular income from that stock, high interest earning investments, too, Wacek says.

Risk: One risk for high interest earning investments stocks is if the company runs into tough times and declares a loss, forcing it to trim or eliminate its dividend entirely, which will hurt the stock price.

8. Preferred stocks

Preferred stocks are more like lower-grade bonds than common stocks. Still, their values may fluctuate substantially if the market falls or if interest rates rise.

Why invest:

Best investment plans in India

Here are a few types of investments that you can choose to park your money in.

• Stocks
  Stocks represent a share of ownership in a company or an entity. Stocks are one of the best investment avenues for long-term investors to earn generous returns. However, since these are market-linked instruments, there is always the risk of capital loss.
  

• Fixed deposit
  Fixed deposit is an ideal investment tool for risk-averse investors. An FD bears no effect of the market movements while offering secured returns on your deposit. Even investors with high-risk appetites choose to invest in FDs to stabilise their portfolios.

• Mutual funds
  Mutual funds are investment tools managed by fund managers which pool people’s money and invest in stocks and bonds of different companies to yield returns. You can earn generous returns even when starting with a smaller initial deposit amount.

• Senior citizen savings scheme
  Senior Citizen Savings Scheme is a long-term saving option for retirees. This option is ideal for those who aim to create a steady and secure income stream post-retirement.

• Public provident fund
  PPF is a trusted investment plan in India. Investments start at just Rs. per annum and the principal invested, interest earned, and maturity amount are all exempt from tax, high interest earning investments. It has a lock-in period of 15 years, with partial withdrawals allowed at various points.

Where should you invest your money

Depending on your risk appetite, you can choose to invest in either market-linked instruments or those that remain unaffected by the market movements. Market-linked investments yield higher returns, but these are not always the best investment high interest earning investments as they come with the risk of losing your capital. In comparison, investment tools like fixed deposits offer more security of funds. Bajaj Finance is one such financier that provides the dual benefit of high FD rates and safety of funds.

How risk appetite affects your investment choices

Most investments carry a certain level of volatility, and usually, the returns on an investment are more when the levels of risk are high. Thus, investment decisions are often taken based on investors’ risk appetite.

Low-risk investments: Fixed-income instruments include bonds, debentures, fixed deposit schemes, and government savings schemes.

Medium-risk investments: Debt funds, balanced mutual funds, and index funds fall in this category.

High-risk investments: Volatile investments include instruments like stocks and equity mutual funds.

Why is the Bajaj Finance FD one of the best investment options

• High interest rates up to % p.a.
• Highest safety ratings of FAAA by CRISIL and MAAA by ICRA
• Periodic payout options with a Non-cumulative FD
• Loan against FD to avoid premature withdrawals

Investing in a Bajaj Finance FD is now easier than ever. Start your investment journey from the comfort of your home with our end-to-end online investment process.

Investing / Strategy

ferrantraite / www.oldyorkcellars.com

A high return is what every investor is after, but it’s not the only factor that matters. When reviewing investments, professionals look not only at absolute return potential but also something called “risk-adjusted return.” The bottom line is that not all returns are created equal, and smart investors look to invest where they’re getting the best value for the risk that they are taking on — even if that means accepting lower returns.

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Through that lens, bitcoin investopedia analysis might prefer an investment that pays just 2% a year over one that’s returning 20%. Why? Because if that 2% return is guaranteed, such as via a U.S. Treasury, but the path to the 20% return involves the risk of losing 40%, that steady 2% could be a better value over time, based on its low risks — especially for a risk-averse investor.

For high interest earning investments individual investor, this balance is all the more important. If you understand how comparing investments requires looking at high interest earning investments returns and the risk with equal weight, you can understand how even a tiny return can be a great deal if the investment is really risk-free.

9 Safe Investments With High interest earning investments Returns

Here’s a closer look at some of the safest investments with the highest returns. You’re unlikely to generate exponential growth with these, but you’re even less likely to lose the money you’re relying on to keep you and your family secure.

1. High-Yield Savings Accounts

The high-yield savings account is pretty much the gold standard of safe investments, offering you strong returns given the total absence of risk. The money you have stashed in almost any bank is insured by the Federal Deposit Insurance Corporation, meaning the government will make you whole on any losses up to $,

Changing Rates

One of the few catches with high-yield savings accounts is that the rate can change in response to current market conditions. When rates are falling, as they have been the past few years, payouts can seem not as attractive.

Currently, top high-yield savings accounts pay a range of interest rates, from %%, which is a far cry from the 2%-plus of just a few years ago, high interest earning investments. However, with the national average savings rate hovering at just % as of Jan. 18, high-yield savings accounts are still a great deal.

Although perhaps not as exciting as potential stock market returns, high-yield savings accounts are very liquid investments, meaning it’s easy to access without penalty if you need it quickly. That makes stashing your emergency fund — something you better have if you’re really looking to limit your financial risk — a pretty decent investment under the circumstances.

Bottom Line: Federal Deposit Insurance Corp. insurance means your money is % safe. It’s easy to get a hold of in a pinch, and rates are well above the national average savings account rate.

Best For: Stashing your emergency fund; investors looking for options without any risks

Learn: Budgeting How To Create a Budget You Can Live With

2, high interest earning investments. Certificates of Deposit

Certificates of deposit are almost identical to savings accounts. Most are FDIC insured and so there’s zero risk involved. However, they are still liquid.

With a CD, you accept a time horizon when you invest — usually anywhere from one month high interest earning investments up to 10 years, high interest earning investments. Although a few CDs allow you to withdraw the money early without consequence, you generally must pay a penalty if you access your cash before the CD term ends. On the one hand, that makes CDs much less valuable for your emergency fund or savings.

On the other, it should mean you’ll get paid a higher rate of return in exchange for that loss of easy access. Basically, banks will have an easier time reinvesting your savings if you’ve promised to leave them alone for a set amount of time. In return, you should be getting a better rate.

Before you get a CD, consider the following:

1. Whether or not you might need that money before the CD’s maturation date. If the answer is yes, you’ll want to look elsewhere.
2. Whether you really are getting a better interest rate than is available with high-yield savings accounts, high interest earning investments. Your only advantage with a CD over a savings account is getting better returns, so if you can find a savings account that pays high interest earning investments than the CD at your banks, there’s just no point.

That said, an FDIC-insured CD’s returns might seem modest, but they’re pretty stellar in the context of the near-total absence of any risk to you of losing money.

Bottom Line: CDs should offer higher returns than most savings accounts, but that comes at a loss of flexibility as you’ll owe a penalty for pulling your money out early.

Best For: Money you can be sure you won’t need for the prescribed time frame; investors with a stable financial picture looking to avoid any risk in their investments

3. Money Market Accounts

Money market accounts operate on similar principles to the CD or savings account. They usually offer better rates than savings accounts, but they also come with more liquidity and might even let you write checks or use a debit card with the account, allowing for greater flexibility when used alongside a savings account.

If you’re using the account just to make deposits and write a monthly rent check, for instance, the MMA could be ideal. However, it has everything to do with the return, so shop around and compare the options not just with other money market accounts but with CDs high interest earning investments high-yield savings accounts as well.

Also, note that the main caveat with a money market account is that you’re limited by law to six transactions a month. Exceed that and you’ll be fined; keep exceeding it and the bank will have to convert your account to high interest earning investments checking account, or perhaps even close your account.

Bottom Line: Money market accounts are very similar to savings accounts but offer the option to write a limited number of checks each month.

Best For: Money you might high interest earning investments to use infrequently; investors looking for a little more flexibility than their savings account offers

Good To Know

The FDIC insurance limit of $, is applied per bank, per person — not for each account. So, if you have a savings account, CD and MMA at the same bank that have a combined $, in them, you’re not insured on $50, of that money.

4, high interest earning investments. Treasury Bonds

Even though a % return on a high-yield savings account is more than you’re likely to get at your bank, you will probably need at least some investments that are taking a bit more risk if you want to build a strong portfolio. The next tier up from banking products in terms of higher risk and higher returns are high interest earning investments, which are essentially structured loans made to a large organization

Treasury bonds, also known as T-bonds, are guaranteed by the full faith and credit of the U.S, high interest earning investments. government depending on how long they take to mature. On your end, treasuries high interest earning investments act just like a CD in many ways. Here’s how it works:

• You invest with a set interest rate and a date of maturity anywhere from one month to 30 years from when you buy the bond.
• You’ll get regular “coupon” payments for the interest while you hold it and then your principal is returned when the bond matures.

While your coupon payments are completely predictable and secure, the face value of your bonds will rise and fall over time based on the prevailing interest rates, stock market performance and any number of other factors. Granted, that could work out in your favor, but only because you’ve taken on additional risk. So, if you aren’t reasonably certain you can hold the bond to maturity, they’re definitely a riskier investment.

Keep in Mind

Unlike a CD, you can’t pull out your money before the maturity date, not even for a penalty. That doesn’t mean you’re stuck — you can easily go out and sell the bond on the secondary market. But at that point, you’ve gone from buying and holding treasuries to maturity, which tends to be incredibly safe, to trading bonds — vastly less safe. 

Bottom Line: Debt issued by the Treasury is backed by the full faith and credit of the U.S. government, making it similarly as free from risk as FDIC-insured bank accounts.

Best For: Money you know you won’t need prior to the maturity date of the bond; funds in excess of the $, insured by the FDIC; investors willing to give up some high interest earning investments in search of slightly better returns

5. Treasury Inflation-Protected Securities

Many people turn to Treasury Inflation-Protected Securities, or High interest earning investments, in response to inflation. Your interest payments are going to be considerably lower than what you would earn on a normal treasury of the same length. However, you’re accepting that lower rate because your principal will increase, or decrease, in value to match inflation as measured by the Consumer Price Index. If inflation suddenly spikes to 5%, anyone with TIPS is sitting pretty while people who bought bonds at a fixed 2% rate are basically losing 3% a year.

Like any other treasuries, you expose yourself to all sorts of additional risk if you have to sell them before they mature, so you should make sure you won’t need to access that money prior to maturity.

Bottom Line: TIPS offer lower yields, high interest earning investments, but the principle will increase or decrease in value based on the prevailing inflation rates while you hold the bond.

Best For: Money you know you won’t need prior to the maturity date of the bond; funds in excess of the $, insured by the FDIC; investors looking for treasuries but interested in removing inflation-based risk from their portfolio

Read: 13 Investing Rules You Should Break During the Pandemic

6. Municipal Bonds

Municipal bonds, which are issued by state and local governments, are a good option for slightly better returns with only slightly more risk. There’s almost no chance the U.S. government defaults, high interest earning investments, but there are definitely cases of major cities filing for bankruptcy and losing their bondholders a lot of money.

But most people are probably aware that a bankruptcy by a major city is pretty rare — though if you want to be extra safe you could steer clear of any cities or states with large, unfunded pension liabilities.

And because the federal government has a vested interest in keeping borrowing costs low for state and local governments, it has made interest earned on munis tax-exempt at the federal level. In some cases, munis are except from state and local taxes as well. So not only are they usually still safe, but they come with the added bonus of reducing your tax bill when compared with many other options.

Bottom Line: These debts issued by state and local governments are a little riskier than treasuries but come with the bonus of being untaxed at the federal level.

Best For: Taking on marginally more risk in pursuit of marginally better returns; investing while also keeping your tax bill as low as possible; investors looking for relatively safe bonds

7. Corporate Bonds

Like governments of various sizes, corporations will also issue debt by way of selling bonds. Like munis, this can mean you’re still in safe territory, but it’s also no sure bet. Plenty of corporations that are teetering on high interest earning investments edge of solvency will offer high yields for the high risk — usually referred to as “junk bonds” — and those aren’t a great call if you’re looking for something really safe.

Although corporate bonds are inherently riskier than treasuries and often riskier than munis, if you’re sticking to major, blue-chip public companies and holding the bonds to maturity, they’re still in the realm of being very safe.

Fortunately, you’re not left to guess how financially sound a company is. Public companies regularly issue financial reports detailing assets, liabilities and income, so you can get a clear sense of where it stands.

And if you, like most people, don’t really know your way around a balance sheet or income statement, you can rely on rating agencies like Moody’s or S&P Global Ratings. In most cases, an AAA-rated bond represents minimal risks if you hold it to maturity.

Bottom Line: These debts issued by corporations are just a bit riskier than munis, but usually offer just a bit more interest income.

Best For: A measured increase in your portfolio’s risk to improve returns; investors looking to diversify their bond holdings

8. S&P Index Fund/ETF

Stock markets can be incredibly volatile, and on any given day you might gain or lose a big chunk of your investment. And given that a GOBankingRates survey of non-investors found that the primary factor keeping more people from buying stocks is a lack of funds to commit, it’s hard for many families to put at risk money they only freed up for saving by making major sacrifices elsewhere.

Diversifying Your Portfolio

Using index funds or exchange-traded funds can build diversification into your portfolio. Any one company can befall a disaster, but if you own shares of a fund holding stock of different companies, you’re spreading that risk out by a lot. All the better if you’re getting shares in large, stable companies that are known as “blue-chip stocks” in investing parlance.

One company might sink due to a disaster, but a few hundred at the same time? It’s highly unlikely.

Owning Stocks for the Long Term

Another strategy is to defray much of the risk of stock investments is to own stocks for a very, very long time. While stock markets are incredibly chaotic over any one week, month or even year, they actually become remarkably predictable when you start to look at them in terms of decades.

Over its history, the S&P has returned roughly 10% a year. And although there have been years where stocks plunged 30% or even 40%, the markets have always rebounded over high interest earning investments following years.

Good To Know

If you had owned an S&P ETF during the financial crisis, your investment would have lost almost half its value in just a few months, but over the next eight years, your investment would have averaged 18% per year, high interest earning investments. So, if you’re treating stock investments as being illiquid and only investing money you can be confident you won’t need to tap into for a few years, you’ll have the flexibility to wait out a nasty downturn in the economy and recover.

Why Choose the S&P Index?

The S&P is one of the most popular options for index investments. The index includes almost all blue-chip stocks, and has that long history of returning roughly 10% a year — an incredible return for how little risk is involved over a high interest earning investments time frame. You might also consider the Russellwhich is made up of the 1, most valuable American companies — giving you double the diversification.

Bottom Line: Stocks are riskier than bonds, but by purchasing large funds that represent hundreds of stocks and holding them for very long time periods, you can mitigate much of that risk and enjoy strong returns compared with bonds.

Best For:Long-term investments you won’t be cashing in for years or even decades; younger investors with plenty of time to be patient with the fluctuating markets; investors interested in growing their money at a faster rate than bonds and banking products can provide

Discover: The Most Fascinating Things You Never Knew You Could Invest In

9, high interest earning investments. Dividend Stocks

Dividend stocks present some especially strong options for a few reasons. A dividend is a regular cash payment issued to shareholders — really the most direct way a stock can direct business success back to its investors. It also, typically, means some important things for the risk profile of that stock.

Here are some factors to consider when assessing a stock’s risk:

1. That dividend is much more consistent and gets paid out whether the stock is up or down. Even if your stock is underperforming in terms of its share value, you’re still high interest earning investments something back, high interest earning investments, making it easier to hold onto the stock and wait out a downswing.
2. The dividend acts as something of a bulwark against falling share prices. Dividends are set as a per-share payment, high interest earning investments, but investors typically focus on the “dividend yield,” which is the percentage of a company’s share price that will be returned as dividends in a given year. As stock prices fall, you’re paying less for that same high interest earning investments higher that yield gets, the harder it’s going to be for bargain-hunting dividend investors to pass it up. That’s not going to mean much for a company that’s obviously headed for bankruptcy — a bad investment regardless of the dividend yield — but it will help prop up the share price for a company that’s just going through some tough times.

Companies can and will slash their dividends in times of extreme hardship. It’s rare, high interest earning investments, as it usually results in the stock plunging — consistency is what people like about dividends, so they tend to react very poorly when a dividend appears less secure — but dividend payments are less secure than the coupon payment on high interest earning investments bond, high interest earning investments, for example, which is fixed.

That said, if you shop around for companies that not only offer a strong yield but have a long track record of consistently increasing their dividend on a regular basis — sometimes referred to as “dividend aristocrats” — you can mitigate a lot of that risk.

Bottom Line: High interest earning investments stock in an individual company is much riskier than the other options, but dividend stocks will provide a steady return whether markets are up or down.

Best For: Long-term investments that still produce passive income; investors looking to invest in order to create a regular income stream; younger investors reinvesting dividends to maximize growth

How Safe Investments With High Returns Compare

The ideal portfolio is one with both minimal risk and maximum returns. There’s always some compromise necessary to find the right balance. Although the relative certainty provided by your savings account is great, the returns it will provide aren’t quite enough on their own to really build wealth.

Likewise, while the returns provided by an S&P fund are much better over the long run, it’s important to look at them in the context of the risk that you must accept — most notably, the risk of double-digit percentage losses over the short-term — that insured banking products just don’t have.

More From GOBankingRates

Daria Uhlig, high interest earning investments, Cynthia Measom and John Csiszar contributed to the reporting for this article.

High-return investments are synonymous with high risk. Taking the chance on high returns also means you could easily lose most, if not all, of your invested money. 

It’s important to match your risk profile with the company and product you’re considering.  Investment options are truly limitless, and it can be difficult to figure out where to put your money. A comprehensive risk and goal assessment can help you narrow your options. 

To get you started, Benzinga’s put together a list of 10 high-return investments — with low, medium and high-risk options you can review. High-risk investments offer incredible potential, but you should remember that could also lose your money. Budgeting, researching, and preparing are almost more important than the investment itself.

3 Low-Risk Investments

Ready to tackle some low-risk investments? Here are 3 great options. 

U.S. Savings Bonds

U.S, high interest earning investments. savings bonds are one of the lowest risk investment types. These securities are issued by the U.S. Treasury and you provide a loan to help the government fund operations. Savings bonds offer a fixed interest rate paid by the government over a specific period of time.

Savings bonds come in 2 types:

• Series EE Bonds earn a fixed interest rate for up to 30 years. This interest is set biannually, high interest earning investments, so you know how much interest the bonds will accrue over the lifetime before you buy. These securities are sold at face make money overtime, so a $ investment nets you a $ U.S. savings bond. Series EE bonds are long-term investments, and you will be penalized for redeeming them early.
• Series I Bonds earn interest based on a combination of the inflation rate and fixed rate. A fixed rate is set once you buy the bonds while the inflation rate is adjusted every 6 months. Cashing out Series I bonds before their 5-year maturity period results in a penalty.

Savings Accounts

A savings account is among the few safe investments with high returns — you can earn interest for every high interest earning investments stashed outside bonds and stocks. Unlike other investment options, high interest earning investments, savings accounts are incredibly liquid, so you can access your cash when you need it.

Certificates of Deposit (CDs)

Certificates of deposits (CDs) are a great low-risk, long-term investment option. A CD account is available at your credit union or bank, and just like a savings account, you high interest earning investments earn interest on money deposited. You’ll earn an interest rate premium in exchange for leaving your deposit untouched for a set period — this could be 6 months or 5 years. Long-term CD accounts pay more than shorter-term ones. If you cash out before the maturity date, you will pay an early withdrawal penalty.

4 Medium Risk Investments

Look into some medium-risk investments if you want higher returns.

Invest in High Dividend Stocks

Dividends are a form of profit-sharing through which a corporation makes regular payments to its shareholders. The payment of dividends isn’t required by law, but corporations choose to pay stockholders a share of the money earned through a reinvestment plan high interest earning investments as a cash option. 

High-dividend stock investing can be risky if you don’t know what to look for. Always consider large corporations with a long history of low volatility and financial stability. This means it probably has enough capital stored to deal with market fluctuations.

After identifying a dividend-paying stock, you can buy directly through the company or through a brokerage. Buying directly through the high interest earning investments requires you to make a minimum investment of $25 to $ A brokerage requires no minimum investment amount.

TradeStation, E*TRADE and TD Ameritrade are great brokerages for high dividend stock investing. All charge no commissions on trades.

Invest in REITs

Real Estate Investment Trusts (REITs) are the best way to spend money in the real estate market without investing thousands as a property owner. A REIT not only provides above-average dividends but also gives solid returns over time as property values rise. 

Start with research for REITs that purchase property in an area of interest. Most REITs are registered with the SEC and listed on public exchanges. These are referred to as publicly-traded REITs. Private REITs are exempt from SEC registration and aren’t listed on public exchanges, high interest earning investments. Diversyfund is an excellent private REIT to help you build a diversified portfolio while high interest earning investments hedge high interest earning investments market volatility.

Invest in Crowdfunding Real Estate

Real estate crowdfunding allows you to pool your money together to invest in properties, high interest earning investments. When a developer identifies an investment opportunity, he or she might not have the ability to fund the investment entirely, so contribute some capital to high interest earning investments your plan. You don’t need a large amount of money to join a crowdfunding deal.

Crowdfunding real estate has 3 players — a sponsor who identifies, plans and oversees the entire investment, a crowdfunding platform where the sponsor rallies investors and capital and an investor who contributes capital in exchange for a portion of profits accrued by the deal.

Investing is one of many ways to make your money work harder for you. The goal is to net eventual returns, and there's a link between an investment's risk level and reward. Higher-risk investments usually have the potential for greater returns, and vice versa. When people talk about high returns, they're usually referring to investments that net higher-than-average financial gains.

Building a diversified investment portfolio is a critical part of long-term financial wellness, and high-return investments such as stocks may be more likely to increase your wealth year after year. Here is a rundown of high-risk investments that could render high-returns.

5 High-Return Investments With High Risk

Some investors have pulled in huge returns with high-risk investments, but it's important to remember that past performance never guarantees future returns. Each involves some degree of unpredictability, which makes them volatile by nature. Here are five types of high-risk, high-return investments:

1. Cryptocurrency

Cryptoassets are considered extremely risky, though there is the potential for significant gains. For instance, the price of Bitcoin (the most well-known cryptocurrency) jumped from $29, in July to $67, in November—a % increase in just four months. However, value tends to swing widely without much notice. As of January , the price had dipped back down to a low of around $35,

This relatively new investment vehicle is both unpredictable and largely unregulated when compared with other securities. There are also inherent cybersecurity risks in crypto investing.

Cryptocurrency is unique in that it's a fully virtual business, and coin value appears to be in constant ebb and flow. It still represents uncharted waters for investors, which is why crypto is still considered a riskier investment than stocks.

2. Individual Stocks

Stock investing is often a risky but necessary part of growing your investment portfolio. From to , the average annualized return on the S&P was %, according to J.P. Morgan. Meanwhile, bonds came in at just %. But unlike bonds, individual stocks are considered volatile as it's virtually impossible to predict winning stocks and time the market just right.

Most experts agree that investing early gives you a longer time horizon and is one of the best ways to hedge stock market risk. Exploring mutual funds and exchange-traded funds (ETFs) is another strategy. They consist of small shares of different kinds of securities, including stocks, bonds and other assets. This provides some built-in diversification and helps reduce risk.

3. Initial Public Offerings (IPOs)

An IPO occurs when a private company first starts offering stock shares to the public. Doing so allows them to raise capital. IPOs can trigger a whirlwind of hype and media attention, which can inflate expectations and cloud an investor's judgment. If you do decide to invest in an IPO, you agree to buy stock shares at the initial offering price.

Getting in isn't always easy, as some brokerage firms require investors to meet certain asset requirements or trading frequencies to participate in an IPO. Either way, IPOs are risky. For every business that takes off after its IPO, there are others that peter out—which could lead to major losses for shareholders. On the flip side, investors could make out well if they buy up shares of a business that ends up thriving. When Tesla announced its IPO in , it began trading at just $17 per share. In late January , that number was over $

4. Venture Capital or Angel Investing

There are multiple ways to fund an early-stage business. If you're an accredited investor (meaning you have adequate income and assets), you could explore venture capital. Venture capitalists typically work for a firm or fund that invests large amounts into startups and other potentially lucrative companies.

Angel investors usually invest in companies directly or with a private group, providing capital and mentorship in exchange for an ownership stake in the company. Angel investors typically invest smaller amounts than venture capitalists, but both are experienced investors who have significant knowledge about growing and profiting from newer companies with strong growth potential.

Risk comes with the territory—there's no way to know for sure which startups will succeed and which will fail—but high returns are definitely a possibility. In early , venture capital funds recorded an internal rate of return of %, according to financial data company Pitchbook.

5. Real Estate

There are many ways to invest in real estate. You can purchase residential properties and earn income renting to tenants, or you can "fix and flip" a property for a quicker potential profit. Commercial real estate is another option, allowing investors to buy properties to rent out to businesses. In any of these examples, you may be able to capture the equity you've built in the property and see a nice return when you sell it—but nothing is ever guaranteed. The real estate market in general can be unpredictable, and future profits are never a sure thing.

There are also upfront costs when buying an investment property. This includes your down payment, closing costs, taxes and insurance. Maintenance and repairs can add up quickly too. Real estate investment trusts (REITs) are considered a safer and less expensive way to get into real estate investing without ever buying actual properties. Most are publicly traded companies that own real estate portfolios containing several different assets. Investors can purchase stock, and the money a REIT brings in is put toward income-generating residential or commercial real estate. They're also required to return 90% of their taxable income to their shareholders by way of dividend payments.

Low-Risk Investments Worth Considering

Finding safe investments with high returns isn't always easy. While returns are typically higher with riskier investments, there are certain lower-risk assets that are worth exploring. They're usually considered safe because losing your invested amount is much less likely. What's more, many can provide more consistent returns than high-risk investments.

Returns will depend on the investments you choose and how much you invest. Here are four types of low-risk investments that may be worth your attention:

1. High-Yield Savings Accounts

A high-yield savings account earns interest and is an ideal place to keep an emergency fund because it is liquid—meaning you can access the money easily when you need it. What makes high-yield savings accounts appealing is that they generally earn more interest than a traditional savings account. Some have interest rates, known as annual percentage yields (APYs), as high as % with no minimum deposit, though you can expect caps on monthly electronic withdrawals and transfers. High-yield savings accounts allow you to keep your emergency fund safe while netting a return in the process.

2. Money Market Accounts

This type of low-risk investment earns interest just like a high-yield savings account. But money market accounts are unique in that they allow even easier access to your money. It isn't uncommon to have a checkbook or debit card attached to your account. These options streamline withdrawals and provide more liquidity than savings accounts—while possibly earning slightly more interest.

You may get a better return with a high-yield savings account, but the flexibility of a money market account can be appealing. Your financial institution might restrict how many electronic withdrawals and transfers you can make in a statement cycle, however, so check the terms before you sign up.

3. Certificates of Deposit (CDs)

When it comes to low-risk investments, a certificate of deposit (CD) might be worthwhile, especially if you don't mind giving up access to your funds for an extended period of time. With a CD, your money is essentially locked up for a predetermined length of time. When that period ends, you'll recoup your investment along with interest. CDs do not offer much in the way of liquidity—you'll be hit with a penalty fee if you choose to tap your funds early.

They earn more interest than traditional savings accounts, but less than many high-yield funds. Some five-year CDs earn around 1%. However, their structure can keep your investment safe and discourage you from making impulsive withdrawals.

4. Series I Bonds

A Series I bond is a high-return investment that blends two different interest rates. One is fixed, the other fluctuates with inflation. Together, they're referred to as the composite rate. Series I bonds that are purchased between now and April will have a composite rate of %. U.S. Treasury Inflation-Protected Securities (TIPS) are also indexed for inflation. That means the principal value of your investment is adjusted so that you won't lose money.

The Bottom Line

There's no such thing as a guaranteed loss or return, but understanding risk can help you determine which investments are right for you. Diversification is often the best path forward. It seeks to balance your portfolio with both high- and low-risk investments to help you meet your long-term financial goals.

Maintaining healthy credit is just as important, as it can qualify you for a wider variety of investments. That's why Experian allows you to check your credit report and credit score for free, whenever you need it.

Investing / Strategy

ferrantraite / www.oldyorkcellars.com

A high return is what every investor is after, but it’s not the only factor that matters. When reviewing investments, professionals look not only at absolute return potential but also something called “risk-adjusted return.” The bottom line is that not all returns are created equal, and smart investors look to invest where they’re getting the best value for the risk that they are taking on — even if that means accepting lower returns.

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Through that lens, you might prefer an investment that pays just 2% a year over one that’s returning 20%. Why? Because if that 2% return is guaranteed, such as via a U.S. Treasury, but the path to the 20% return involves the risk of losing 40%, that steady 2% could be a better value over time, based on its low risks — especially for a risk-averse investor.

For the individual investor, this balance is all the more important. If you understand how comparing investments requires looking at both returns and the risk with equal weight, you can understand how even a tiny return can be a great deal if the investment is really risk-free.

9 Safe Investments With High Returns

Here’s a closer look at some of the safest investments with the highest returns. You’re unlikely to generate exponential growth with these, but you’re even less likely to lose the money you’re relying on to keep you and your family secure.

1. High-Yield Savings Accounts

The high-yield savings account is pretty much the gold standard of safe investments, offering you strong returns given the total absence of risk. The money you have stashed in almost any bank is insured by the Federal Deposit Insurance Corporation, meaning the government will make you whole on any losses up to $,

Changing Rates

One of the few catches with high-yield savings accounts is that the rate can change in response to current market conditions. When rates are falling, as they have been the past few years, payouts can seem not as attractive.

Currently, top high-yield savings accounts pay a range of interest rates, from %%, which is a far cry from the 2%-plus of just a few years ago. However, with the national average savings rate hovering at just % as of Jan. 18, high-yield savings accounts are still a great deal.

Although perhaps not as exciting as potential stock market returns, high-yield savings accounts are very liquid investments, meaning it’s easy to access without penalty if you need it quickly. That makes stashing your emergency fund — something you better have if you’re really looking to limit your financial risk — a pretty decent investment under the circumstances.

Bottom Line: Federal Deposit Insurance Corp. insurance means your money is % safe. It’s easy to get a hold of in a pinch, and rates are well above the national average savings account rate.

Best For: Stashing your emergency fund; investors looking for options without any risks

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2. Certificates of Deposit

Certificates of deposit are almost identical to savings accounts. Most are FDIC insured and so there’s zero risk involved. However, they are still liquid.

With a CD, you accept a time horizon when you invest — usually anywhere from one month to up to 10 years. Although a few CDs allow you to withdraw the money early without consequence, you generally must pay a penalty if you access your cash before the CD term ends. On the one hand, that makes CDs much less valuable for your emergency fund or savings.

On the other, it should mean you’ll get paid a higher rate of return in exchange for that loss of easy access. Basically, banks will have an easier time reinvesting your savings if you’ve promised to leave them alone for a set amount of time. In return, you should be getting a better rate.

Before you get a CD, consider the following:

1. Whether or not you might need that money before the CD’s maturation date. If the answer is yes, you’ll want to look elsewhere.
2. Whether you really are getting a better interest rate than is available with high-yield savings accounts. Your only advantage with a CD over a savings account is getting better returns, so if you can find a savings account that pays better than the CD at your banks, there’s just no point.

That said, an FDIC-insured CD’s returns might seem modest, but they’re pretty stellar in the context of the near-total absence of any risk to you of losing money.

Bottom Line: CDs should offer higher returns than most savings accounts, but that comes at a loss of flexibility as you’ll owe a penalty for pulling your money out early.

Best For: Money you can be sure you won’t need for the prescribed time frame; investors with a stable financial picture looking to avoid any risk in their investments

3. Money Market Accounts

Money market accounts operate on similar principles to the CD or savings account. They usually offer better rates than savings accounts, but they also come with more liquidity and might even let you write checks or use a debit card with the account, allowing for greater flexibility when used alongside a savings account.

If you’re using the account just to make deposits and write a monthly rent check, for instance, the MMA could be ideal. However, it has everything to do with the return, so shop around and compare the options not just with other money market accounts but with CDs and high-yield savings accounts as well.

Also, note that the main caveat with a money market account is that you’re limited by law to six transactions a month. Exceed that and you’ll be fined; keep exceeding it and the bank will have to convert your account to a checking account, or perhaps even close your account.

Bottom Line: Money market accounts are very similar to savings accounts but offer the option to write a limited number of checks each month.

Best For: Money you might need to use infrequently; investors looking for a little more flexibility than their savings account offers

Good To Know

The FDIC insurance limit of $, is applied per bank, per person — not for each account. So, if you have a savings account, CD and MMA at the same bank that have a combined $, in them, you’re not insured on $50, of that money.

4. Treasury Bonds

Even though a % return on a high-yield savings account is more than you’re likely to get at your bank, you will probably need at least some investments that are taking a bit more risk if you want to build a strong portfolio. The next tier up from banking products in terms of higher risk and higher returns are bonds, which are essentially structured loans made to a large organization

Treasury bonds, also known as T-bonds, are guaranteed by the full faith and credit of the U.S. government depending on how long they take to mature. On your end, treasuries will act just like a CD in many ways. Here’s how it works:

• You invest with a set interest rate and a date of maturity anywhere from one month to 30 years from when you buy the bond.
• You’ll get regular “coupon” payments for the interest while you hold it and then your principal is returned when the bond matures.

While your coupon payments are completely predictable and secure, the face value of your bonds will rise and fall over time based on the prevailing interest rates, stock market performance and any number of other factors. Granted, that could work out in your favor, but only because you’ve taken on additional risk. So, if you aren’t reasonably certain you can hold the bond to maturity, they’re definitely a riskier investment.

Keep in Mind

Unlike a CD, you can’t pull out your money before the maturity date, not even for a penalty. That doesn’t mean you’re stuck — you can easily go out and sell the bond on the secondary market. But at that point, you’ve gone from buying and holding treasuries to maturity, which tends to be incredibly safe, to trading bonds — vastly less safe. 

Bottom Line: Debt issued by the Treasury is backed by the full faith and credit of the U.S. government, making it similarly as free from risk as FDIC-insured bank accounts.

Best For: Money you know you won’t need prior to the maturity date of the bond; funds in excess of the $, insured by the FDIC; investors willing to give up some flexibility in search of slightly better returns

5. Treasury Inflation-Protected Securities

Many people turn to Treasury Inflation-Protected Securities, or TIPS, in response to inflation. Your interest payments are going to be considerably lower than what you would earn on a normal treasury of the same length. However, you’re accepting that lower rate because your principal will increase, or decrease, in value to match inflation as measured by the Consumer Price Index. If inflation suddenly spikes to 5%, anyone with TIPS is sitting pretty while people who bought bonds at a fixed 2% rate are basically losing 3% a year.

Like any other treasuries, you expose yourself to all sorts of additional risk if you have to sell them before they mature, so you should make sure you won’t need to access that money prior to maturity.

Bottom Line: TIPS offer lower yields, but the principle will increase or decrease in value based on the prevailing inflation rates while you hold the bond.

Best For: Money you know you won’t need prior to the maturity date of the bond; funds in excess of the $, insured by the FDIC; investors looking for treasuries but interested in removing inflation-based risk from their portfolio

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6. Municipal Bonds

Municipal bonds, which are issued by state and local governments, are a good option for slightly better returns with only slightly more risk. There’s almost no chance the U.S. government defaults, but there are definitely cases of major cities filing for bankruptcy and losing their bondholders a lot of money.

But most people are probably aware that a bankruptcy by a major city is pretty rare — though if you want to be extra safe you could steer clear of any cities or states with large, unfunded pension liabilities.

And because the federal government has a vested interest in keeping borrowing costs low for state and local governments, it has made interest earned on munis tax-exempt at the federal level. In some cases, munis are except from state and local taxes as well. So not only are they usually still safe, but they come with the added bonus of reducing your tax bill when compared with many other options.

Bottom Line: These debts issued by state and local governments are a little riskier than treasuries but come with the bonus of being untaxed at the federal level.

Best For: Taking on marginally more risk in pursuit of marginally better returns; investing while also keeping your tax bill as low as possible; investors looking for relatively safe bonds

7. Corporate Bonds

Like governments of various sizes, corporations will also issue debt by way of selling bonds. Like munis, this can mean you’re still in safe territory, but it’s also no sure bet. Plenty of corporations that are teetering on the edge of solvency will offer high yields for the high risk — usually referred to as “junk bonds” — and those aren’t a great call if you’re looking for something really safe.

Although corporate bonds are inherently riskier than treasuries and often riskier than munis, if you’re sticking to major, blue-chip public companies and holding the bonds to maturity, they’re still in the realm of being very safe.

Fortunately, you’re not left to guess how financially sound a company is. Public companies regularly issue financial reports detailing assets, liabilities and income, so you can get a clear sense of where it stands.

And if you, like most people, don’t really know your way around a balance sheet or income statement, you can rely on rating agencies like Moody’s or S&P Global Ratings. In most cases, an AAA-rated bond represents minimal risks if you hold it to maturity.

Bottom Line: These debts issued by corporations are just a bit riskier than munis, but usually offer just a bit more interest income.

Best For: A measured increase in your portfolio’s risk to improve returns; investors looking to diversify their bond holdings

8. S&P Index Fund/ETF

Stock markets can be incredibly volatile, and on any given day you might gain or lose a big chunk of your investment. And given that a GOBankingRates survey of non-investors found that the primary factor keeping more people from buying stocks is a lack of funds to commit, it’s hard for many families to put at risk money they only freed up for saving by making major sacrifices elsewhere.

Diversifying Your Portfolio

Using index funds or exchange-traded funds can build diversification into your portfolio. Any one company can befall a disaster, but if you own shares of a fund holding stock of different companies, you’re spreading that risk out by a lot. All the better if you’re getting shares in large, stable companies that are known as “blue-chip stocks” in investing parlance.

One company might sink due to a disaster, but a few hundred at the same time? It’s highly unlikely.

Owning Stocks for the Long Term

Another strategy is to defray much of the risk of stock investments is to own stocks for a very, very long time. While stock markets are incredibly chaotic over any one week, month or even year, they actually become remarkably predictable when you start to look at them in terms of decades.

Over its history, the S&P has returned roughly 10% a year. And although there have been years where stocks plunged 30% or even 40%, the markets have always rebounded over the following years.

Good To Know

If you had owned an S&P ETF during the financial crisis, your investment would have lost almost half its value in just a few months, but over the next eight years, your investment would have averaged 18% per year. So, if you’re treating stock investments as being illiquid and only investing money you can be confident you won’t need to tap into for a few years, you’ll have the flexibility to wait out a nasty downturn in the economy and recover.

Why Choose the S&P Index?

The S&P is one of the most popular options for index investments. The index includes almost all blue-chip stocks, and has that long history of returning roughly 10% a year — an incredible return for how little risk is involved over a long time frame. You might also consider the Russell , which is made up of the 1, most valuable American companies — giving you double the diversification.

Bottom Line: Stocks are riskier than bonds, but by purchasing large funds that represent hundreds of stocks and holding them for very long time periods, you can mitigate much of that risk and enjoy strong returns compared with bonds.

Best For:Long-term investments you won’t be cashing in for years or even decades; younger investors with plenty of time to be patient with the fluctuating markets; investors interested in growing their money at a faster rate than bonds and banking products can provide

Discover: The Most Fascinating Things You Never Knew You Could Invest In

9. Dividend Stocks

Dividend stocks present some especially strong options for a few reasons. A dividend is a regular cash payment issued to shareholders — really the most direct way a stock can direct business success back to its investors. It also, typically, means some important things for the risk profile of that stock.

Here are some factors to consider when assessing a stock’s risk:

1. That dividend is much more consistent and gets paid out whether the stock is up or down. Even if your stock is underperforming in terms of its share value, you’re still getting something back, making it easier to hold onto the stock and wait out a downswing.
2. The dividend acts as something of a bulwark against falling share prices. Dividends are set as a per-share payment, but investors typically focus on the “dividend yield,” which is the percentage of a company’s share price that will be returned as dividends in a given year. As stock prices fall, you’re paying less for that same dividend.
3. The higher that yield gets, the harder it’s going to be for bargain-hunting dividend investors to pass it up. That’s not going to mean much for a company that’s obviously headed for bankruptcy — a bad investment regardless of the dividend yield — but it will help prop up the share price for a company that’s just going through some tough times.

Companies can and will slash their dividends in times of extreme hardship. It’s rare, as it usually results in the stock plunging — consistency is what people like about dividends, so they tend to react very poorly when a dividend appears less secure — but dividend payments are less secure than the coupon payment on a bond, for example, which is fixed.

That said, if you shop around for companies that not only offer a strong yield but have a long track record of consistently increasing their dividend on a regular basis — sometimes referred to as “dividend aristocrats” — you can mitigate a lot of that risk.

Bottom Line: Owning stock in an individual company is much riskier than the other options, but dividend stocks will provide a steady return whether markets are up or down.

Best For: Long-term investments that still produce passive income; investors looking to invest in order to create a regular income stream; younger investors reinvesting dividends to maximize growth

How Safe Investments With High Returns Compare

The ideal portfolio is one with both minimal risk and maximum returns. There’s always some compromise necessary to find the right balance. Although the relative certainty provided by your savings account is great, the returns it will provide aren’t quite enough on their own to really build wealth.

Likewise, while the returns provided by an S&P fund are much better over the long run, it’s important to look at them in the context of the risk that you must accept — most notably, the risk of double-digit percentage losses over the short-term — that insured banking products just don’t have.

More From GOBankingRates

Daria Uhlig, Cynthia Measom and John Csiszar contributed to the reporting for this article.

High-return investments are synonymous with high risk. Taking the chance on high returns also means you could easily lose most, if not all, of your invested money. 

It’s important to match your risk profile with the company and product you’re considering.  Investment options are truly limitless, and it can be difficult to figure out where to put your money. A comprehensive risk and goal assessment can help you narrow your options. 

To get you started, Benzinga’s put together a list of 10 high-return investments — with low, medium and high-risk options you can review. High-risk investments offer incredible potential, but you should remember that could also lose your money. Budgeting, researching, and preparing are almost more important than the investment itself.

3 Low-Risk Investments

Ready to tackle some low-risk investments? Here are 3 great options. 

U.S. Savings Bonds

U.S. savings bonds are one of the lowest risk investment types. These securities are issued by the U.S. Treasury and you provide a loan to help the government fund operations. Savings bonds offer a fixed interest rate paid by the government over a specific period of time.

Savings bonds come in 2 types:

• Series EE Bonds earn a fixed interest rate for up to 30 years. This interest is set biannually, so you know how much interest the bonds will accrue over the lifetime before you buy. These securities are sold at face value, so a $ investment nets you a $ U.S. savings bond. Series EE bonds are long-term investments, and you will be penalized for redeeming them early.
• Series I Bonds earn interest based on a combination of the inflation rate and fixed rate. A fixed rate is set once you buy the bonds while the inflation rate is adjusted every 6 months. Cashing out Series I bonds before their 5-year maturity period results in a penalty.

Savings Accounts

A savings account is among the few safe investments with high returns — you can earn interest for every dollar stashed outside bonds and stocks. Unlike other investment options, savings accounts are incredibly liquid, so you can access your cash when you need it.

Certificates of Deposit (CDs)

Certificates of deposits (CDs) are a great low-risk, long-term investment option. A CD account is available at your credit union or bank, and just like a savings account, you can earn interest on money deposited. You’ll earn an interest rate premium in exchange for leaving your deposit untouched for a set period — this could be 6 months or 5 years. Long-term CD accounts pay more than shorter-term ones. If you cash out before the maturity date, you will pay an early withdrawal penalty.

4 Medium Risk Investments

Look into some medium-risk investments if you want higher returns.

Invest in High Dividend Stocks

Dividends are a form of profit-sharing through which a corporation makes regular payments to its shareholders. The payment of dividends isn’t required by law, but corporations choose to pay stockholders a share of the money earned through a reinvestment plan or as a cash option. 

High-dividend stock investing can be risky if you don’t know what to look for. Always consider large corporations with a long history of low volatility and financial stability. This means it probably has enough capital stored to deal with market fluctuations.

After identifying a dividend-paying stock, you can buy directly through the company or through a brokerage. Buying directly through the company requires you to make a minimum investment of $25 to $ A brokerage requires no minimum investment amount.

TradeStation, E*TRADE and TD Ameritrade are great brokerages for high dividend stock investing. All charge no commissions on trades.

Invest in REITs

Real Estate Investment Trusts (REITs) are the best way to spend money in the real estate market without investing thousands as a property owner. A REIT not only provides above-average dividends but also gives solid returns over time as property values rise. 

Start with research for REITs that purchase property in an area of interest. Most REITs are registered with the SEC and listed on public exchanges. These are referred to as publicly-traded REITs. Private REITs are exempt from SEC registration and aren’t listed on public exchanges. Diversyfund is an excellent private REIT to help you build a diversified portfolio while you hedge against market volatility.

Invest in Crowdfunding Real Estate

Real estate crowdfunding allows you to pool your money together to invest in properties. When a developer identifies an investment opportunity, he or she might not have the ability to fund the investment entirely, so contribute some capital to execute your plan. You don’t need a large amount of money to join a crowdfunding deal.

Crowdfunding real estate has 3 players — a sponsor who identifies, plans and oversees the entire investment, a crowdfunding platform where the sponsor rallies investors and capital and an investor who contributes capital in exchange for a portion of profits accrued by the deal.

With the economy facing high inflation, the Federal Reserve ready to raise interest rates and rising tension from the conflict in Ukraine, is shaping up to be a bumpy ride for investors. So it&#x;s crucial that investors stay disciplined. Building a portfolio that has at least some less-risky assets can be useful in helping you ride out volatility in the market.

The trade-off, of course, is that in lowering risk exposure, investors are likely to earn lower returns over the long run. That may be fine if your goal is to preserve capital and maintain a steady flow of interest income.

But if you&#x;re looking for growth, consider investing strategies that match your long-term goals. Even higher-risk investments such as stocks have segments (such as dividend stocks) that reduce relative risk while still providing attractive long-term returns.

What to consider

Depending on how much risk you&#x;re willing to take, there are a couple of scenarios that could play out:

• No risk &#x; You&#x;ll never lose a cent of your principal.
• Some risk &#x; It&#x;s reasonable to say you&#x;ll either break even or incur a small loss over time.

There are, however, two catches: Low-risk investments earn lower returns than you could find elsewhere with risk; and inflation can erode the purchasing power of money stashed in low-risk investments.

If you opt for only low-risk investments, you&#x;re likely to lose purchasing power over time. It&#x;s also why low-risk plays make for better short-term investments or a stash for your emergency fund. In contrast, higher-risk investments are better suited for higher long-term returns.

Here are the best low-risk investments in March

1. High-yield savings accounts
2. Series I savings bonds
3. Short-term certificates of deposit
4. Money market funds
5. Treasury bills, notes, bonds and TIPS
6. Corporate bonds
7. Dividend-paying stocks
8. Preferred stocks
9. Money market accounts
10. Fixed annuities

Overview: Best low-risk investments in

1. High-yield savings accounts

While not technically an investment, savings accounts offer a modest return on your money. You&#x;ll find the highest-yielding options by searching online, and you can get a bit more yield if you&#x;re willing to check out the rate tables and shop around.

Why invest: A savings account is completely safe in the sense that you&#x;ll never lose money. Most accounts are government-insured up to $, per account type per bank, so you&#x;ll be compensated even if the financial institution fails.

Risk: Cash doesn&#x;t lose dollar value, though inflation can erode its purchasing power.

2. Series I savings bonds

A Series I savings bond is a low-risk bond that adjusts for inflation, helping protect your investment. When inflation rises, the bond&#x;s interest rate is adjusted upward. But when inflation falls, the bond&#x;s payment falls as well. You can buy the Series I bond from www.oldyorkcellars.com, which is operated by the U.S. Department of the Treasury.

The I bond is a good choice for protection against inflation because you get a fixed rate and an inflation rate added to that every six months, says McKayla Braden, former senior advisor for the Department of the Treasury, referring to an inflation premium that&#x;s revised twice a year.

Why invest: The Series I bond adjusts its payment semi-annually depending on the inflation rate. With the high inflation levels seen in , the bond is paying out a sizable yield. That will adjust higher if inflation rises, too. So the bond helps protect your investment against the ravages of increasing prices.

Risk: Savings bonds are backed by the U.S. government, so they&#x;re considered about as safe as an investment comes. However, don&#x;t forget that the bond&#x;s interest payment will fall if and when inflation settles back down.

If a U.S. savings bond is redeemed before five years, a penalty of the last three months&#x; interest is charged.

3. Short-term certificates of deposit

Bank CDs are always loss-proof in an FDIC-backed account, unless you take the money out early. To find the best rates, you&#x;ll want to shop around online and compare what banks offer. With interest rates slated to rise in , it may make sense to own short-term CDs and then reinvest as rates move up. You&#x;ll want to avoid being locked into below-market CDs for too long.

An alternative to a short-term CD is a no-penalty CD, which lets you dodge the typical penalty for early withdrawal. So you can withdraw your money and then move it into a higher-paying CD without the usual costs.

Why invest: If you leave the CD intact until the term ends the bank promises to pay you a set rate of interest over the specified term.

Some savings accounts pay higher rates of interest than some CDs, but those so-called high-yield accounts may require a large deposit.

Risk: If you remove funds from a CD early, you&#x;ll usually lose some of the interest you earned. Some banks also hit you with a loss of a portion of principal as well, so it&#x;s important to read the rules and check rates before you purchase a CD. Additionally, if you lock yourself into a longer-term CD and overall rates rise, you&#x;ll be earning a lower yield. To get a market rate, you&#x;ll need to cancel the CD and will typically have to pay a penalty to do so.

4. Money market funds

Money market funds are pools of CDs, short-term bonds and other low-risk investments grouped together to diversify risk, and are typically sold by brokerage firms and mutual fund companies.

Why invest: Unlike a CD, a money market fund is liquid, which means you typically can take out your funds at any time without being penalized.

Risk: Money market funds usually are pretty safe, says Ben Wacek, founder and financial planner of Guide Financial Planning in Minneapolis.

The bank tells you what rate you&#x;ll get, and its goal is that the value per share won&#x;t be less than $1, he says.

5. Treasury bills, notes, bonds and TIPS

The U.S. Treasury also issues Treasury bills, Treasury notes, Treasury bonds and Treasury inflation-protected securities, or TIPS:

• Treasury bills mature in one year or sooner.
• Treasury notes stretch out up to 10 years.
• Treasury bonds mature up to 30 years.
• TIPS are securities whose principal value goes up or down depending on the direction of inflation.

Why invest: All of these are highly liquid securities that can be bought and sold either directly or through mutual funds.

Risk:If you keep Treasurys until they mature, you generally won&#x;t lose any money, unless you buy a negative-yielding bond. If you sell them sooner than maturity, you could lose some of your principal, since the value will fluctuate as interest rates rise and fall. Rising interest rates make the value of existing bonds fall, and vice versa.

6. Corporate bonds

Companies also issue bonds, which can come in relatively low-risk varieties (issued by large profitable companies) down to very risky ones. The lowest of the low are known as high-yield bonds or junk bonds.

There are high-yield corporate bonds that are low rate, low quality, says Cheryl Krueger, founder of Growing Fortunes Financial Partners in Schaumburg, Illinois. I consider those more risky because you have not just the interest rate risk, but the default risk as well.

• Interest-rate risk: The market value of a bond can fluctuate as interest rates change. Bond values move up when rates fall and bond values move down when rates rise.
• Default risk: The company could fail to make good on its promise to make the interest and principal payments, potentially leaving you with nothing on the investment.

Why invest: To mitigate interest-rate risk, investors can select bonds that mature in the next few years. Longer-term bonds are more sensitive to changes in interest rates. To lower default risk, investors can select high-quality bonds from reputable large companies, or buy funds that invest in a diversified portfolio of these bonds.

Risk: Bonds are generally thought to be lower risk than stocks, though neither asset class is risk-free.

Bondholders are higher in the pecking order than stockholders, so if the company goes bankrupt, bondholders get their money back before stockholders, Wacek says.

7. Dividend-paying stocks

Stocks aren&#x;t as safe as cash, savings accounts or government debt, but they&#x;re generally less risky than high-fliers like options or futures. Dividend stocks are considered safer than high-growth stocks, because they pay cash dividends, helping to limit their volatility but not eliminating it. So dividend stocks will fluctuate with the market but may not fall as far when the market is depressed.

Why invest: Stocks that pay dividends are generally perceived as less risky than those that don&#x;t.

I wouldn&#x;t say a dividend-paying stock is a low-risk investment because there were dividend-paying stocks that lost 20 percent or 30 percent in , Wacek says. But in general, it&#x;s lower risk than a growth stock.

That&#x;s because dividend-paying companies tend to be more stable and mature, and they offer the dividend, as well as the possibility of stock-price appreciation.

You&#x;re not depending on only the value of that stock, which can fluctuate, but you&#x;re getting paid a regular income from that stock, too, Wacek says.

Risk: One risk for dividend stocks is if the company runs into tough times and declares a loss, forcing it to trim or eliminate its dividend entirely, which will hurt the stock price.

8. Preferred stocks

Preferred stocks are more like lower-grade bonds than common stocks. Still, their values may fluctuate substantially if the market falls or if interest rates rise.

Why invest: