Date: November 7, 2024
Investors today are looking for the best of both worlds: high returns with low risk.
But is it possible to find an investment that offers both safety and a strong return? In this article, we explore options for safe investments that can still offer significant returns.
Exploring Safe Investment Options with High Returns
Everyone wants their money to grow, but no one likes losing their hard-earned cash to risky investments. For those interested in low-risk, high-return options, there are choices to consider. Below are some safe investments that may offer good returns while keeping your principal protected.
What Does a Safe Investment Mean
When we talk about a “safe investment,” we mean one that minimizes risk. Safe investments are typically low-risk options that are less likely to lose their value over time. Many of these investments are backed by strong financial institutions or governments, which makes them more secure than riskier options like individual stocks or cryptocurrencies.
For more on what makes an investment safe, you can check out this detailed guide on investment risk. in our Business and Financial News Key Developments in October 2024 article.
Best Safe Investments with High Returns
Safe investments vary in returns, risk levels, and liquidity. Let’s examine several investment options that balance safety with decent potential returns.
- High-Yield Savings Accounts
One of the simplest and safest ways to invest is through high-yield savings accounts. These accounts work like regular savings accounts but offer higher interest rates. High-yield savings accounts are typically available from online banks, which can offer better rates due to lower operating costs.
For more information on high-yield savings accounts, you can visit NerdWallet’s list of best high-yield savings accounts.
- Certificates of Deposit (CDs)
Certificates of Deposit, or CDs, are another popular safe investment. With a CD, you agree to deposit your money for a fixed period, such as six months, one year, or even five years. In return, banks offer a fixed interest rate.
You can learn more about how CDs work in this resource from the Federal Reserve.
- Government Bonds
Government bonds are debt securities issued by governments to fund projects and activities. For example, in the U.S., Treasury bonds, bills, and notes are popular options. These bonds are among the safest investments because they are backed by the government.
To see current rates for government bonds, you can visit the U.S. Treasury’s official site.
- Municipal Bonds
Municipal bonds, often called “munis,” are issued by state or local governments to fund public projects. These bonds can be a safe investment, especially if issued by a financially stable city or municipality.
For more details on municipal bonds, you can check out this Investopedia article on municipal bonds.
- Dividend-Paying Stocks
Dividend stocks are shares in companies that pay dividends, or a portion of profits, to shareholders. Companies that consistently pay dividends are often financially stable, with a long history of good performance.
For an overview of dividend-paying stocks, see this beginner’s guide to dividends.
- Real Estate Investment Trusts (REITs)
A Real Estate Investment Trust (REIT) is a company that owns or finances income-producing real estate. REITs can offer a steady stream of income as they pay out most of their profits as dividends.
To learn about REITs and how to invest in them, you can visit the National Association of Real Estate Investment Trusts (Nareit).
- Corporate Bonds
Corporate bonds are similar to government bonds but are issued by companies rather than governments. Bonds from well-established companies can offer relatively safe returns with higher yields than government bonds.
You can learn more about corporate bonds at FINRA’s guide to corporate bonds.
- Money Market Accounts
Money market accounts are another secure way to earn interest on cash deposits. They are similar to savings accounts but usually offer higher interest rates and sometimes come with check-writing privileges.
If you want to understand more about money market accounts, check out Bankrate’s money market guide.
Tips for Maximizing Returns in Safe Investments
Finding the safest investment with the highest return is not always easy, but you can increase your chances with a few strategies.
For a deeper dive on maximizing investment returns, you can check this resource on safe investing strategies.