Safety and risk are key buzzwords when it comes to investing. It is an investor’s dream to have access to investment vehicles that are considered safe investments or low risk investments that, as a bonus, offer higher rates or return as well. Who wouldn’t want to investment in such a proposition? Unfortunately, the reality isn’t close in following this idealist scenario and the truth is that one either lands up securing safe investments or low risk investments that compromises returns or vice versa.
For the purpose of education, we are presenting some safe investments and low risk investments that have traditionally pleased investors as well. Here are our picks of [relatively] safe investments:
Savings accounts. Savings accounts offered by banks or credit unions are often considered low risk investments. Not only do they provide for a fixed interest rate as earning, they are also backed by the security of FDIC up to a certain amount. While savings accounts are safe investments, the downside is that they do not provide very high interest rates and it is appreciation and the principal’s growth is relatively slow.
Certificates of Deposit. Certificates of Deposit (or CDs as they are commonly known) offer a relatively higher interest rates in comparison to a traditional bank savings account, but on the downside require you to lock in your money for a relatively longer period of time.
Government savings bonds. Uncle Sam is one of the largest providers of low risk investments in the world. The US Treasury (or savings) Bonds are considered a very safe investment by many market watchers.
Annuities. Fixed annuities are also considered safe investments, primarily because they provide a fixed income stream after a pre-determined period of time.
Money Market Accounts. Money market accounts are also considered low risk investments. Although not as safe as a CD or savings account, they offer a slightly higher interest rate as compared to a savings account.
It need not be reiterated that while these are relative low risk or safe investments, there is no 100% guarantee that they will deliver as promised.
Disclaimer: This article is not intended as investment advice. You must check with a qualified professional before making any investment decision.