Looking for some relatively low-risk ways to earn a respectable return? You may be in luck. With interest rates still near recent highs, you may find some promising options.
Below, we outline a variety of low-risk investments and accounts that can offer a decent return in todays interest rate environment. Before selecting one option—or a combination—be sure to consider your goals, risk tolerance, and investment horizon.
As you think through your strategy, keep in mind that theres often a risk-reward trade-off, says Richard Carter, a vice president of fixed income products and services at Fidelity Investments.
“Do your homework,” Carter says. “Diversifying the investments in your portfolio can help manage risk even within what might be considered low-risk investments. When evaluating fixed income investments investors need to recognize that even low-risk investments may involve differences in the degree of credit or default risk, their amount of price volatility, and the timing of their payouts or return profile.”
If you need guidance, a Fidelity professional can help you create a plan thats right for you.
Are you losing sleep wondering where to park your hard-earned cash in today’s uncertain economy? You’re not alone! With markets fluctuating wildly and economic headlines making us all a bit nervous, finding truly safe investments has become a top priority for many of us.
As someone who’s been navigating these choppy financial waters alongside you, I’ve put together this comprehensive guide to help identify what genuinely constitutes the safest investments at the moment. Whether you’re building an emergency fund, saving for a short-term goal, or just trying to protect some of your portfolio from volatility, this article will give you practical, actionable information.
Understanding “Safe” in Today’s Investment Landscape
Before diving into specific options, let’s clarify what we mean by “safe” investments. In the investment world, safety typically means:
- Minimal risk to your principal (the original amount you invested)
- Predictable returns
- Protection against major market downturns
- Often (but not always) some protection against inflation
It’s crucial to understand that “safe” doesn’t necessarily mean “high return.” There’s always a trade-off between safety and potential growth. The safer the investment, the lower the expected return usually is.
Top 10 Safest Investments Right Now
1. High-Yield Savings Accounts
High-yield savings accounts remain among the safest places to store cash. They’re FDIC-insured up to $250,000 per depositor, per bank, meaning your money is protected even if the financial institution fails.
Why they’re safe: Government insurance protection, no market risk, immediate liquidity.
Current situation As of late 2025, many online banks still offer APYs over 45%, which is historically quite good. However, be aware that inflation can erode purchasing power over time
2. Treasury Securities (T-Bills, Notes, and Bonds)
U.S. Treasury securities are backed by the “full faith and credit” of the U.S. government making them extremely safe investments.
Types include:
- Treasury bills (maturity of one year or less)
- Treasury notes (1-10 year maturities)
- Treasury bonds (up to 30 years)
- TIPS (Treasury Inflation-Protected Securities)
TIPS are particularly noteworthy as they adjust with inflation, providing some protection against rising prices – a feature most other “safe” investments lack.
3. Certificates of Deposit (CDs)
CDs offer fixed interest rates for specific terms, usually ranging from a few months to several years.
Safety factor: Like savings accounts, CDs at FDIC-insured banks are protected up to $250,000.
Strategy tip: Consider CD laddering (buying CDs with different maturity dates) to maintain some liquidity while capturing higher rates on longer-term CDs.
4. Money Market Funds
Money market funds invest in very short-term, high-quality debt, such as Treasury bills and commercial paper from stable companies.
What makes them safe: They aim to maintain a stable $1 per share value, though this isn’t guaranteed.
Liquidity bonus: Unlike CDs, you can generally withdraw your money without penalties, making them ideal for emergency funds or temporary cash parking.
5. Cash Management Accounts
These hybrid accounts, typically offered by brokerages, combine features of checking, savings, and investment accounts.
Safety profile: Most sweep uninvested cash into FDIC-insured accounts across multiple banks, potentially providing insurance well beyond the standard $250,000 limit.
Modern convenience: They often offer competitive interest rates with the flexibility to easily move money between saving and investing.
6. Investment-Grade Corporate Bonds
These are debt securities issued by large, financially stable companies.
Risk level: Higher than Treasuries but generally considered safe for income-focused investors.
Current outlook: Short to medium-term investment-grade bonds can provide stable returns with modest risk exposure.
7. Fixed Annuities
Fixed annuities are contracts with insurance companies that guarantee a specific interest rate for a set period.
Safety considerations: The guarantee is only as strong as the insurance company backing it, so stick with highly-rated insurers.
Retirement advantage: They can provide reliable, guaranteed income for essential expenses in retirement.
8. Dividend-Paying Stocks
While not “safe” in the traditional sense, certain dividend stocks from stable companies have historically weathered market downturns better than growth stocks.
Partial safety net: The dividend provides some income regardless of stock price movements.
Companies to consider: Look for those with a long history of maintaining or increasing their dividends through various economic cycles.
9. Preferred Stocks
These hybrid securities combine characteristics of both stocks and bonds.
Safety profile: They rank higher than common stocks in a company’s capital structure, meaning preferred shareholders get paid before common shareholders.
Income focus: They typically pay higher dividends than common stocks from the same company.
10. Real Estate Investment Trusts (REITs)
REITs own and operate income-producing real estate.
Why they’re considered safer: They’re required to distribute at least 90% of taxable income to shareholders as dividends.
Tangible asset backing: Unlike some paper assets, REITs are backed by physical properties.
Balancing Safety and Growth: Creating Your Strategy
Now that we’ve covered the safest investment options, I wanna share how I personally think about balancing safety and growth:
The Bucket Approach
I like to divide my investments into three buckets:
-
Safety bucket (0-3 years): Money I might need soon goes into high-yield savings, money market funds, short-term CDs, and Treasury bills.
-
Income bucket (3-7 years): Funds I won’t need for a few years go into longer-term CDs, bond funds, fixed annuities, and some dividend stocks.
-
Growth bucket (7+ years): Money I don’t need for many years can take more risk in growth stocks, real estate, and other higher-return investments.
This approach helps me sleep at night knowing my near-term needs are covered while still giving the rest of my portfolio a chance to grow.
Factors to Consider When Choosing Safe Investments
When deciding which safe investments are right for you, consider:
- Time horizon: How soon will you need the money?
- Liquidity needs: How quickly might you need to access your funds?
- Current interest rates: Higher rates make safe investments more attractive
- Inflation: Will your “safe” investment keep pace with rising prices?
- Tax implications: Some investments offer tax advantages (like municipal bonds)
- Total portfolio context: How does this safe investment fit within your overall strategy?
Safest Investments for Different Goals
For Emergency Funds:
- High-yield savings accounts
- Money market funds
- Cash management accounts
For Short-Term Goals (1-3 years):
- Short-term CDs
- Treasury bills
- High-yield savings accounts
For Medium-Term Goals (3-7 years):
- Bond ladders
- Fixed annuities
- Longer-term CDs
For Retirement Income:
- Fixed annuities
- Dividend stocks
- Bond ladders
- REITs
Common Mistakes to Avoid with Safe Investments
- Chasing yield without understanding the risks – Higher returns always come with higher risks
- Ignoring inflation – A “safe” 3% return isn’t safe if inflation is 4%
- Overconcentration – Even “safe” investments should be diversified
- Locking up too much money – Maintain enough liquidity for unexpected needs
- Forgetting tax implications – Consider after-tax returns when comparing options
Current Market Conditions and Safe Investments
As of late 2025, we’re seeing some interesting trends in the “safe investment” landscape:
- The Federal Reserve has been lowering interest rates, which affects yields on safe investments
- Inflation concerns remain, making TIPS and other inflation-protected investments attractive
- Economic uncertainty continues to drive investors toward safer options
- Online banks continue offering competitive rates compared to traditional brick-and-mortar institutions
Expert Recommendations
Financial advisors widely recommend keeping money for near-term spending and essential living costs in conservative investments, even during strong markets.
As Brennan Decima, owner of Decima Wealth Consulting, puts it: “In retirement, we treat the dividends as the bonus component of the income plan.” He emphasizes that household expenses in retirement should be covered by guaranteed income, not subject to market fluctuations.
Jay Zigmont, founder and CEO of Childfree Wealth, adds a practical perspective: “Keep in mind that there is such a thing as too much cash.” He advises keeping enough cash for emergencies and planned expenses, but investing the rest for growth.
Real-World Safe Investment Strategy
Let me share a practical example of how this might look:
Sarah, 45, has $100,000 she wants to invest safely:
- $25,000 in a high-yield savings account (emergency fund)
- $25,000 in a ladder of 6-month, 1-year, and 2-year CDs
- $20,000 in short-term Treasury bills
- $15,000 in investment-grade corporate bonds
- $10,000 in dividend-paying stocks from stable utilities and consumer staples
- $5,000 in a REIT ETF
This gives her excellent safety and liquidity for short-term needs while still providing some growth potential and inflation protection.
Final Thoughts: Safety in a Changing World
The definition of “safe” investments evolves with economic conditions. What worked five years ago might not be the safest option today. That’s why it’s crucial to regularly review your safe investments and adjust as needed.
Remember, true financial safety isn’t just about picking the right investments—it’s about building a comprehensive strategy that aligns with your specific goals, time horizon, and risk tolerance.
For most of us, the ideal approach isn’t to seek out a single “safest” investment, but rather to create a diversified portfolio of safe investments that work together to preserve capital, generate income, and maintain purchasing power in different economic environments.
What safe investments are you currently using? Have you made any changes to your safety strategy recently? I’d love to hear your thoughts and experiences in the comments below!
Money market funds
Money market funds are mutual funds that invest in short-term, low-risk assets like Treasury and government securities, commercial paper, or municipal debt—depending on the focus of the fund. Because their underlying investments are typically high quality, they are generally less volatile than other types of mutual funds, such as stock funds.1
Money market funds offer diversification and liquidity. Yet, as with any other investment, there are potential downsides, such as the fact that the income you receive on your investment will fluctuate both up and down based on the yields available on the securities in which money market mutual funds invest. In addition, the money is not protected by the FDIC or NCUA.
You can purchase a money market fund from a brokerage or a fund company. At Fidelity, any uninvested cash deposited in a Fidelity brokerage account is automatically put in a money market fund ().2
Find money market funds at Fidelity: Mutual Funds Research. (Choose money market funds from the dropdown menu under Asset Class and Category.)
This investment option is backed by the US government and comes in 3 types: bills, notes, and bonds. Bills mature in one year or less, notes span up to 10 years, and bonds typically mature in 20 to 30 years. When you buy any of these, youre lending money to the US government. At the end of the term, youll get your initial investment back—known as the principal, face value, or par value—plus the interest youve earned.
The government also offers Treasury Inflation-Protected Securities (TIPS.) TIPS have a fixed interest rate, but the principal adjusts with inflation or deflation, as measured by the Consumer Price Index (CPI). While TIPS can help you hedge against inflation, their interest rate is often lower than other Treasury securities.
You can also buy Treasury securities at a bank, credit union, brokerage, or directly through the government via its . But Carter notes, “TreasuryDirect only allows you to invest in Treasury securities at the auction, as new issues. Fidelity allows you to purchase Treasurys at the auctions and to buy and sell Treasurys in the secondary market.”
Find Treasury securities and the latest yields at Fidelity: Fixed Income, Bonds, and CDs
Government agencies and government sponsored enterprises (GSEs) issue bonds as a way of raising money. GSEs include the Federal Home Loan Mortgage Corporation (Freddie Mac), the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Banks and the Federal Farm Credit Banks. Bonds issued by GSEs are subject to credit and default risk.
Federal agencies, on the other hand, such as the Government National Mortgage Association (Ginnie Mae), are part of the federal government and they are backed by the “full faith and credit” of the US government. Ginnie Mae, however, does not issue bonds directly; it insures or guarantees mortgage-backed securities originated by other lenders.
However, not all agencies have government backing; one example is the Tennessee Valley Authority (TVA). TVA bonds are not backed by the US government. Instead, theyre backed by the revenues generated by the agencys projects.
Some of the potential benefits of agency/GSE bonds include slightly higher yields than US Treasurys of the same maturity and agency/GSE bonds tend be of high credit quality.
Find agency/GSE bonds and the latest yields at Fidelity: Fixed Income, Bonds, and CDs
Certificates of deposit (CDs)
CDs provide reliable, fixed-rate returns on a lump sum of money over a fixed period of time, such as 6 months, 1 year, or 5 years. You can get a traditional CD at a bank or credit union where they are insured by the Federal Deposit Insurance Corporation (FDIC). They typically require a minimum deposit, and you’ll be hit with a penalty if you pull your money out before the CD matures.
You can also get brokered CDs—which are similar to bank CDs in that they are FDIC-insured but differ in that they are issued by banks to customers of brokerage companies as securities that can be held in a brokerage account. Brokered CDs are usually issued in large amounts to the brokerage, which it then divides into smaller parts for resale.
With a brokered CD, the broker’s underlying CD purchase from the bank is insured. So in the off chance insurance is needed, it will flow from the bank to the brokerage to the investor.
Brokered CDs are subject to the same FDIC limits as traditional CDs. But buying CDs through a brokerage firm can help you expand the amount of FDIC protection inside a brokerage account by buying multiple brokered CDs from different issuers.
Unlike traditional CDs, brokered CDs can be bought and sold on the secondary market before they mature. But doing so will incur trading fees and the price you are able to receive on the secondary market may be below the price you originally paid for the CD.
If you buy a brokered CD as a new issue CD at Fidelity, there are no management fees or transaction costs if you hold it to maturity. Typically, CDs require a minimum purchase of $1,000. Fidelity also offers Fractional CDs, available in minimums and increments of $100.
Find CDs and the latest rates at Fidelity: Fixed Income, Bonds, and CDs
I’m 23, How Should I Be Investing?
FAQ
What is the safest investment right now?
How to turn $10,000 into $100,000 fast?
How to turn $5000 into $1 million?
Where should I invest $1000 monthly for a higher return?
Mutual funds: Similar to an ETF, a mutual fund allows many people to pool their money to buy a variety of stocks, bonds, or other assets. It’s typically managed by a team of professional investors. Index funds, ETFs, and mutual funds can all be great for easily diversifying a $1,000 investment.