There are many options in the market to put your money to work and benefit from some interest. If you'd like to stay conservative and don't risk your savings, here are some ideas.
Whether you're a conservative money manager, or you're in a scenario where you don't want to invest your money in a risky market, you can think of going for some safe investments. This can be beneficial if you’re behind on your retirement savings or emergency fund, or if you’re worried about an upcoming recession or bear market. You’ll still want to see your savings grow in these situations, so you may want to go for any of these safe investment options.
Traditional savings account with your bank or credit union will offer some interest on your money. The amount you put in your account is insured via the FDIC, so you can rest knowing that you’ll get your money back no matter what could happen. Take into account that interest rates are pretty low here, sometimes even lower than the inflation rates.
High-Yield Online Savings Accounts
You can look for these options at online-only banks. You’ll find interest rates of 1-3%, so you should consider opening an account and deposit your savings there. As they have low costs, online banks can offer no fees or lower fees than traditional banks. Your money will be also under FDIC protection.
Certificates of Deposit (CDs)
Certificates of Deposit or “CDs” are a type of savings accounts that will put your money to work for you over a period of time. They are one of the safest investment options where you can also get better interest rates. The CDs often require as little as $500 or $1,000 to open at a minimum. The downside is that your money must stay there for a period of time, sometimes a year, to get the best interest rates. You can withdraw early, but then you'll miss out on possible earnings.
These investment options are in the field of insurance companies. You’d invest through these companies by providing them some money to manage and they’d pay you a guaranteed return. Usually, the interest on a fixed annuity is tax-deferred. Fixed annuities are predictable and help you grow your money with lower risk. Your savings will also be secured, because these investments are monitored by the State Insurance Commissioner. Again, consider that your money will be tied to this investment for a specific term.
Treasury securities are issued by the U.S. Government and are typically divided into a few categories based on the length of the investment until they reach maturity. You can choose between many treasury securities: bills, notes, bonds, U.S. savings bonds, and Treasury inflation-protected securities. Take into account that there are various levels of maturity in each option, so you can earn some money in a month or leave it working for 30 years. If you need to withdraw it before the maturity date, you can still get a decent price when you go to sell it.
If you'd like to read more about safe money investment options with higher returns, read this article!