People are always looking for the safest investments with the highest returns. But the truth is that it’s not as easy as it sounds. For some people, that may be too high of a hurdle, or for others, they are worried about the risk of losing any money.
Just because there is risk involved doesn’t mean there isn’t a way to make money without putting your cash at risk. There are plenty of investments out there that can provide an excellent return without putting your money at risk.
Some investments will even provide a return with zero risks, but they are limited and won’t be available to everyone.
Here are 12 of the safest investments that won’t put your money at risk.
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12 safest investments of 2023
1. Preferred stocks
Preferred stocks are stocks that pay a fixed dividend and are very safe. This is usually one of the safest investments, at least compared to most stocks. While they are generally good investments, there are different levels of preferred stocks. The lower level preferred stocks carry greater risk, but they also have a greater return.
The most significant difference between the lower and higher levels of preferred stocks is the opportunity to earn a dividend. The higher dividends are paid out based on the number of shares issued. Depending on the dividend level, you can expect from 0.5% to 3%.
If you compare the dividends from preferred stocks to bonds, you’ll see that the preferred stocks pay out more. Also, with a share of preferred stock, you have voting rights and can cede your position to a sibling or another relative.
2. High-yield savings accounts
High-yield savings accounts are some of the safest investments you can make. Plus, they also provide a higher return than regular savings accounts. The interest can be as high as 5-6% at times, which is comparable to some CDs (certificates of deposit) without putting your money at risk.
The biggest difference between savings accounts and a CD is that, unlike the CD, you can withdraw the money in a savings account at any time without any penalty. The interest rate of savings accounts may fluctuate with market conditions, but they will usually remain competitive with regular savings rates.
3. Certificates of deposit
A certificate of deposit is a savings account with a higher interest rate. They are considered the safest investment in that they provide a great return without putting your money at risk. There are some risks associated with them, but nothing compared to other investments in the market.
The biggest risk of a CD is that you can’t touch the money in it for usually six months to a year or longer. Nevertheless, they are popular savings vehicles because they offer a great return. The interest rate for CDs can be as high as 5% in addition to being FDIC insured.
4. Money market funds
Money market funds are just like their name states, which is they are a fund where you can invest your money. The return on these funds is higher than a regular savings account because investment experts manage them.
These funds have restrictions on withdrawing your money but usually offer a higher yield than regular savings accounts. While they are very safe, one risk with them is the interest rate may drop. When this happens, the yield for these funds may drop to 0%.
5. Savings bonds
Savings bonds are an excellent option for those who want to put their money into what are one of the safest investments you can make. Besides being very safe, they also have an excellent return for what the investment is. The best feature of these bonds is the US government backs them.
The drawback to these bonds is that they’re not liquid. This means that the bonds must be redeemed in full on a specific date and at a certain price. The other drawback is they have a small yield.
6. Corporate bonds
Corporate bonds are bonds issued by businesses and usually have a higher rate of return than other investments. However, the risk is that you may lose your investment if the company goes under or cannot pay its debts.
Corporate bonds are a great way to diversify your portfolio because they have a slightly higher rate of return than savings or corporate bonds. The reason they have a higher rate of return is that they are riskier.
7. Dividend-paying stocks
This is another popular choice for investors looking to diversify their portfolio. Dividend-paying shares are stocks that can pay out a cash dividend quarterly. To be profitable, they must have enough growth and will need to generate enough revenue. This will allow them to pay out a dividend.
Dividend-paying shares tend to be riskier than other stocks and have higher rates of return, but you need to be aware that the rate of return does not cover the risk for investors. If you choose to buy dividend-paying shares, please be cautious and do your research first. You are buying shares of the company itself, not the currency.
8. Fixed annuities
An annuity is a contract between you and an insurance company. You buy the annuity with a lump-sum investment, and the company gives you a regular payment every month for the rest of your life. It’s not a loan; no matter how much money you make or how much you need, it will always grow to the same amount. The company can guarantee that because it gets a fixed interest rate on the money it lent to you.
The biggest drawback of these annuities is they have a high risk of not paying out your promised monthly payment. This is why it’s essential to do your research before investing in one. However, if you want a great return on your money and don’t want the risk of losing it, this is a good investment for you.
9. Treasury bills, notes, bonds, and TIPS
These are Treasury bills, notes, bonds, and TIPS. They are very safe to invest in because the US government issues them. The main thing about these securities is that they are backed by the US government and have a low risk.
Treasury investments are one of the safest investments because the federal government guarantees their interest rates. They are very safe and don’t offer much return, but they can be a good choice for investors who don’t want to risk their money at all.
10. Money market accounts
This is an account that can be opened by individuals and is considered to be very safe. So safe, in fact, that it will guarantee that your money will always grow at a specific rate. This is why it’s considered to be one of the most stable investments.
One of the biggest drawbacks of these accounts is that you cannot withdraw money at any time. Instead, you have to wait until a certain period for a withdrawal to be made. Also, you have to pay a fee for the services that are offered.
11. Gold, silver, and precious metals
Yes, there’s risk in precious metals, but they’ll never be worth zero. People have flocked to gold during bad times and good times alike. Some will say that investing in precious metals is a risky endeavor, but you know that gold will always have value.
You’ll never wake up one day and see that your bars of silver are worthless. Sure, they may be worth less than they were the day before, but that’s what investing is all about. So if you are seeking little to no risk at all, precious metals aren’t for you. However, if you are searching for something that will retain its value, these are investments to look into.
12. Blue-chip stocks
Blue-chip stocks are considered to be very safe investments. These stocks are usually well-established companies that have proven themselves over the years. In addition, these companies can grow their earnings and return on investment through mergers and acquisitions.
If you are looking for something that will be very safe and offer a slight rate of return, this is the type of stock for you. They have a good return on investment and have been around for years, so the risk is minimal. They have been proven to be very safe, but your financial goal may determine if this is the type of stock that you’d want to buy.
Are the safest investments really safe?
As you have read, there is a risk in investing. Never put all of your money into one investment opportunity. When investing, try to diversify your portfolio with a variety of investments. This is the best way to have a stable long-term investment.
There’s no such thing as a risk-free investment, but these are as close as you’ll ever get. If you have never put your money into an investment, try buying one of the ones mentioned above. The entire process should be painless and not confusing in the slightest. Remember, the goal here is to find an investment that you will get the most use out of and grow your money.
