10 Best Low-Risk Investments Right Now (2024)

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

Whether you’re new to markets or a seasoned pro, low-risk investments are a great option for conservative investors who want to protect their money from potential losses while still benefiting from modest growth.

It’s important to understand that while investing in low-risk assets can preserve your capital, it also limits your returns. Benefits of low-risk investing include additional diversification, and it’s especially helpful for people who are saving money for near-term financial goals like a home down payment.

FEATURED PARTNER OFFER

eToro

10 Best Low-Risk Investments Right Now (1)

Deposit $100 and get a $10 bonus! (US Only)

Trade in a variety of assets including stocks, ETFs and cryptocurrencies

eToro offers trading tools to help both novices and experts

Low Risk Investments

1. U.S. Treasury Bills, Notes and Bonds

  • Risk level: Very low
  • Potential returns: Low to moderate, depending on maturity

U.S. Treasury securities are backed by the full faith and credit of the U.S. government. Historically, the U.S. has always paid its debts, which helps to ensure that Treasurys are the lowest-risk investments you can own.

There are a wide variety of maturities available. Treasury bills, also referred to T-bills, have maturities of four, eight, 13, 26 and 52 weeks. They are sold at a discount to their face value, and your return is the difference between the purchase price and par value at redemption.

Treasury notes come in maturities of two and ten years. Treasury bonds have long maturities of 20 to 30 years, which means they carry slightly more risk than shorter-duration Treasury securities. Both bonds and notes make interest payments every six months.

The market for U.S. Treasurys is the largest, most liquid market in the world, making them easy to sell if you need access to your cash before the maturity date.

2. Series I Savings Bonds

  • Risk level: Very low
  • Potential returns: Depends on the rate of inflation

I bonds are a special type of U.S. savings bond with a variable interest rate designed to keep up with inflation, as measured by the consumer price index (CPI).

They offer returns based on two interest rates: A fixed rate that remains the same for the 30-year term of the bond, plus a variable interest rate that is updated every six months to match the prevailing rate of inflation.

In addition, I bonds benefit from semiannual compounding: Earned interest is added to the value of the bond twice a year, gradually increasing the principal on which you earn interest. You must hold the bond for at least one year before cashing out, and there is a small penalty if you cash out before five years have passed.

If you live in a place with high taxes, I bonds are a good option since their interest payments are exempt from both state and local taxes.

3. Treasury Inflation-Protected Securities (TIPS)

  • Risk level: Very low
  • Potential returns: Depends on the rate of inflation

Treasury inflation-protected securities (TIPS) are issued by the U.S. Treasury, and like I bonds they use a special mechanism to ensure that returns keep up with the rate of inflation. TIPS offer maturities of five, 10 or 30 years.

Most bonds promise to return your original investment—the so-called principal—plus a fixed or variable amount of interest. TIPS offer a fixed rate of interest, but their principal value increases or decreases in line with the prevailing rate of inflation as measured by CPI.

At maturity, if the principal is higher than your original investment, you keep the increased amount. If the principal is equal to or lower than your principal investment, you get the original amount back. TIPS pay interest every six months, based on the adjusted principal.

4. Fixed Annuities

  • Risk level: Very low
  • Potential returns: Modest

Fixed annuities are a popular type of annuity contract that are frequently used for retirement planning, but can also be useful for medium-term financial goals. Sold byinsurance companies and financial services companies, a fixed annuity guarantees a fixed rate of return over a set period of time, regardless of market conditions.

There are two stages in the life of an annuity: the accumulation phase and the payout phase. In the first, you make a series of payments into your annuity and earn interest that grows the value of your account tax deferred. The payout phase may be either a single, lump-sum payment or a series of regular payments over time.

Although inflation can erode the value of a fixed annuity, many companies offer cost-of-living-adjustment (COLA) riders that help the value of your annuity keep up with rising prices.

5. High-Yield Savings Accounts

  • Risk level: Very low
  • Potential returns: The best high-yield savings accounts can offer moderate returns, depending on prevailing interest rates

High-yield savings accounts offer an unbeatable combination of a modest return on your money, unlimited liquidity—you can withdraw money whenever you wish—plus the backing of the Federal Deposit Insurance Corp. (FDIC), which insures deposits up to a set limit.

With next to no risk of losing money plus the possibility of modest returns (depending on prevailing rates), parking your emergency fund or cash you need for near-term purchases in a high-yield savings account makes a lot of sense.

The interest rates offered by high-yield savings accounts can vary widely depending on market conditions. But you’ll never lose money on your principal and earned interest.

6. Certificates of Deposit (CDs)

  • Risk level: Very low
  • Potential returns: The best CDs may offer returns that match or beat high-yield savings accounts

These time deposit accounts allow you to invest your money at a set rate for a fixed period of time. Withdrawing the money prior to your maturity date will trigger an early withdrawal penalty fee.

There are different types of CDs—like regular, bump-up, step-up, high-yield, jumbo, no-penalty and IRA CDs, for example—and different financial institutions will have different rules and fees. Certificates of deposit are insured by the FDIC up to statutory limits, which makes them a very low-risk investment option.

7. Money Market Mutual Funds

  • Risk level: Low
  • Potential returns: Modest

Money market mutual funds invest in various fixed-income securities with short maturities and very low credit risks. They tend to pay a modest amount of interest, but unlike other kinds of mutual funds there’s very little chance to make money from appreciation.

This type of investment offers plenty of liquidity, and because of the types of investments they make, they are considered to be very safe with very little risk of losing money. But unlike savings accounts or CDs, they are not backed by the FDIC.

Money market mutual funds are best used as a parking place for cash that you might want to keep easily accessible for a big purchase or another investment opportunity.

8. Investment-Grade Corporate Bonds

  • Risk level: Moderate
  • Potential returns: Modest to high

Corporate bonds are fixed-income securities issued by public companies. When a public company has a very good credit rating, their bonds are investment grade—also called high grade—which means the company is very likely to keep paying interest over the life of the bond and return the principal at maturity.

Credit rating agencies like Moody’s, Standard & Poor’s and Fitch assign credit ratings to companies after doing in-depth research on their finances and stability. But just because a bond is considered investment grade today is no guarantee that a company won’t get into trouble tomorrow and see their credit rating downgraded. That’s why this type of investment carries more risk than the others noted above.

9. Preferred Stocks

  • Risk Level: Moderate
  • Potential returns: Modest to high

Preferred stocks combine the characteristics of stocks and bonds in one security—providing investors with dependable income payments plus the potential for shares to appreciate over time.

Shares of preferred stock are issued with a set face value, and income from preferred stock gets preferential tax treatment, as qualified dividends tend to be taxed at a lower rate than bond interest.

Although common stock dividends are reduced or eliminated before preferred stock dividends, in the case of company profit loss, preferred stock dividends may also be lowered or eliminated.

10. Dividend Aristocrats

  • Risk level: Moderate
  • Potential returns: Moderate to High

Many public companies pay dividends, but the dividend aristocrats are special. These companies have demonstrated remarkable long-term stability and reliability in their dividend payouts.

A public company is considered to be a dividend aristocrat after having increased their annual dividend payments for a minimum of 25 years in a row. There are other qualifications—included in the S&P 500 index, have a minimum market capitalization of $3 billion—but what matters for investors is that these companies have maintained good dividend yields over the long term.

Owning shares of a public company can be more risky than other options on this list, but the dividend aristocrats can also provide you with dependable cash flow no matter what the stock market is doing—plus the chance of appreciation over time.

What is Risk?

Risk within the context of investing is the potential for your investments to lose all of their money or simply achieve lower returns than you anticipated or hoped for.

Risk tolerance is your personal comfort with uncertainty. The greater your risk tolerance, the more you’re willing to bet that an investment will pay off and the more you’re willing to lose if you bet wrong. In investing, higher risks generally mean higher rewards.

If you can’t afford to lose any money, then you must have a low risk tolerance. Even if you can afford to lose money on an investment, if your personal temperament means that you will cash out investments at a loss during times of market volatility in spite of an investment strategy designed for long-term growth, then a conservative investment strategy may be right for you.

Considerations for Low-Risk Investors

Understand Your Risk Tolerance

Although each of the investments listed above is considered low risk, there is still a sliding scale of risk associated within them.

Plopping your money into a certificate of deposit that guarantees a specific rate of return will be much lower-risk than entering the world of the dividend aristocrats.

In other words, even a “low-risk” investor should spend some time considering just how much “risk” they can tolerate, and pick an investment accordingly.

Know Your Time Horizon

Knowing when you want to access your money—your investing time horizon—is also essential when it comes to investing.

Certain certificates of deposit charge fees for withdrawing your money before the maturity date, for example, while money that’s in a high-yield savings account is yours pretty much at the click of a button or ATM visit.

Use your plans for this money—monthly income, home down payment in five years, retirement income, etc.—to also help dictate where you decide to invest.

Frequently Asked Questions (FAQs)

What is low-risk investing?

Low-risk investing involves buying assets that have a low probability of incurring losses. While you’re less likely to see losses with a low-risk investment, you’re also less likely to earn a significant return.

Examples of low-risk investing include buying treasury securities, corporate bonds, money market mutual funds, fixed annuities, preferred stocks, common stocks that pay dividends and index funds

Why own low-risk investments?

Low-risk investments can be a safe way to grow your money more quickly than you would with a traditional savings account—especially in a low interest rate environment—without worrying about the potential for the potential losses that may come with riskier options.

If you’re trying to max out your potential for growth, low-risk investments likely aren’t for you.

When should you buy low-risk investments?

Low-risk investments are best for people who want to grow their money more quickly than a traditional savings account interest rate offers, but who also want to avoid the potential for large losses.

When the Federal Reserve lowers key interest rates, for example, banks may follow suit by dropping their average savings accounts rates. In this environment, low-risk investments can earn higher returns than a savings account without taking on too much risk.

What is risk management?

Risk management is the process of determining potential risks associated with individual investments, portfolios and lifetime financial management strategies. Regardless of your personal risk tolerance, you must periodically evaluate your individual and big-picture financial decisions to ensure that they align with your values and goals.

Are there high-yield low-risk investments?

Low-risk investments aren’t likely to offer high-yield results. By definition, a low-risk investment usually offers higher returns than traditional bank deposits, but it involves less risk than other investment opportunities. Less risk usually means less chance for high growth.

There are opportunities for more growth within low-risk investments, depending on your tolerance for risk, but overall, any investment that is considered low-risk will net you less in returns than a higher risk investment opportunity.

10 Best Low-Risk Investments Right Now (2024)

FAQs

Which investment gives the highest return with low risk? ›

Best Low-Risk Investments With High Returns
  • High-Interest Savings Account. ...
  • Annuities. ...
  • Money Market Mutual Fund. ...
  • Municipal Bonds. ...
  • Certificate of Deposits. ...
  • Debt-focused Unit Linked Insurance Plans (ULIPs) ...
  • Treasury Bills. ...
  • Fixed Deposits.
Jan 29, 2024

What investment has the lowest risk? ›

Safe assets such as U.S. Treasury securities, high-yield savings accounts, money market funds, and certain types of bonds and annuities offer a lower risk investment option for those prioritizing capital preservation and steady, albeit generally lower, returns.

What is the safest investment right now? ›

  • Treasury Inflation-Protected Securities (TIPS) ...
  • Fixed Annuities. ...
  • High-Yield Savings Accounts. ...
  • Certificates of Deposit (CDs) Risk level: Very low. ...
  • Money Market Mutual Funds. Risk level: Low. ...
  • Investment-Grade Corporate Bonds. Risk level: Moderate. ...
  • Preferred Stocks. Risk Level: Moderate. ...
  • Dividend Aristocrats. Risk level: Moderate.
Mar 21, 2024

What is the absolute best investment right now? ›

11 best investments right now
  • High-yield savings accounts.
  • Certificates of deposit (CDs)
  • Bonds.
  • Money market funds.
  • Mutual funds.
  • Index Funds.
  • Exchange-traded funds.
  • Stocks.
Mar 19, 2024

Where can I get 12% interest on my money? ›

Where can I find a 12% interest savings account?
Bank nameAccount nameAPY
Khan Bank365-day, 18-month and 24-month Ordinary Term Savings Account12.3% to 12.8%
Khan Bank12-month, 18-month and 24-month Online Term Deposit Account12.4% to 12.9%
YieldN/AUp to 12%
Crypto.comCrypto.com EarnUp to 14.5%
6 more rows
Jun 1, 2023

What is the safest investment with the highest return? ›

Here are the best low-risk investments in April 2024:
  • High-yield savings accounts.
  • Money market funds.
  • Short-term certificates of deposit.
  • Series I savings bonds.
  • Treasury bills, notes, bonds and TIPS.
  • Corporate bonds.
  • Dividend-paying stocks.
  • Preferred stocks.
Apr 1, 2024

What investment has the highest return? ›

Key Takeaways
  • The U.S. stock market is considered to offer the highest investment returns over time.
  • Higher returns, however, come with higher risk.
  • Stock prices typically are more volatile than bond prices.
  • Stock prices over shorter time periods are more volatile than stock prices over longer time periods.

Where to get 10 percent return on investment? ›

Summary of the best investments with 10% ROI
  • Private credit.
  • Individual stocks.
  • Real estate.
  • Fine art.
  • Debt.
  • A business.
  • Private startups.
  • Cryptocurrencies.
Jan 4, 2024

How to invest small amounts of money? ›

7 easy ways to start investing with little money
  1. Workplace retirement account. If your investing goal is retirement, you can take part in an employer-sponsored retirement plan. ...
  2. IRA retirement account. ...
  3. Purchase fractional shares of stock. ...
  4. Index funds and ETFs. ...
  5. Savings bonds. ...
  6. Certificate of Deposit (CD)
Jan 22, 2024

Is there a 100% safe investment? ›

What Is a Safe Investment? U.S. government Treasury bonds are considered 100% safe because their returns are predictable and guaranteed.

What is the safest investment for retirees? ›

Overall, some of the safest investments for retirees tend to be a mix of mutual funds, preferably index funds, that invest in the stock and bond markets, as well as liquid money market funds (i.e., those that pay interest).

How to start investing low risk? ›

Here's a look at some of the most popular low-risk investments.
  1. High-yield savings accounts. Unfortunately, there's no such thing as high-return, low-risk investments. ...
  2. Short-term certificates of deposit. ...
  3. Money market funds. ...
  4. Treasury bills. ...
  5. Treasury notes. ...
  6. Treasury bonds. ...
  7. Treasury Inflation-Protected Securities. ...
  8. Corporate bonds.
Apr 3, 2024

Where is the best place to invest $1,000 right now? ›

Put it in an IRA

If you're wondering how to invest $1,000, putting your money in a retirement account offers one of the highest potential returns. You can opt for a workplace retirement account or open an IRA on your own with an online broker.

What are the top 10 stocks to buy right now? ›

Sign up for Kiplinger's Free E-Newsletters
Company (ticker)Analysts' consensus recommendation scoreAnalysts' consensus recommendation
Amazon.com (AMZN)1.30Strong Buy
Microsoft (MSFT)1.32Strong Buy
Delta Air Lines (DAL)1.35Strong Buy
Nvidia (NVDA)1.38Strong Buy
15 more rows

How to make money double? ›

The classic approach of doubling your money by investing in a diversified portfolio of stocks and bonds is probably the one that applies to most investors. Investing to double your money can be done safely over several years, but for those who are impatient, there's more of a risk of losing most or all of their money.

How to get 10% return on investment? ›

Investments That Can Potentially Return 10% or More
  1. Stocks.
  2. Real Estate.
  3. Private Credit.
  4. Junk Bonds.
  5. Index Funds.
  6. Buying a Business.
  7. High-End Art or Other Collectables.
Sep 17, 2023

Which investment is best for high returns? ›

22 Investment Plans to choose from
  • Public Provident Fund (PPF) Traditionally considered to be among the best and safest investment modes in India, PPF is one of the most popular small savings scheme. ...
  • Mutual Funds. ...
  • Direct Equity. ...
  • Real Estate Investment. ...
  • Gold investment. ...
  • Post Office Saving Scheme. ...
  • Company Fixed Deposits (FDs)

References

Top Articles
Latest Posts
Article information

Author: Msgr. Refugio Daniel

Last Updated:

Views: 5293

Rating: 4.3 / 5 (74 voted)

Reviews: 81% of readers found this page helpful

Author information

Name: Msgr. Refugio Daniel

Birthday: 1999-09-15

Address: 8416 Beatty Center, Derekfort, VA 72092-0500

Phone: +6838967160603

Job: Mining Executive

Hobby: Woodworking, Knitting, Fishing, Coffee roasting, Kayaking, Horseback riding, Kite flying

Introduction: My name is Msgr. Refugio Daniel, I am a fine, precious, encouraging, calm, glamorous, vivacious, friendly person who loves writing and wants to share my knowledge and understanding with you.