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Are you sitting there with a pile of hard-earned cash, wondering “where can I invest my money without risk?” You’re not alone! In today’s unpredictable economy, finding truly safe places for your money feels like trying to find a unicorn But don’t worry – I’ve done the legwork for you
Truth is, while no investment is 100% risk-free (sorry to burst that bubble!), there are definitely some options that come pretty darn close Today, I’m gonna walk you through the best low-risk investment options available right now in 2025 that can help preserve your capital while still earning some returns
Understanding the Risk-Reward Trade-Off
Before diving into specific investment options, let’s get real about something important: in the investing world, there’s almost always a trade-off between risk and reward. Generally speaking:
- Lower risk = Lower potential returns
- Higher risk = Higher potential returns
As Richard Carter, VP of fixed income products at Fidelity Investments, points out “Do your homework Diversifying the investments in your portfolio can help manage risk even within what might be considered low-risk investments”
When considering “risk-free” investments, we’re typically looking at two main scenarios:
- No risk – You’ll never lose a cent of your principal
- Some risk – You may lose money, but you often have a chance to make more than in a no-risk scenario
Here’s the catch though – even with “no risk” investments, inflation can erode the purchasing power of your money over time. This is why truly risk-averse investments are better for short-term goals or emergency funds, not necessarily long-term wealth building.
10 Best Low-Risk Investment Options in 2025
1. High-Yield Savings Accounts
Risk Level: Extremely Low
High-yield savings accounts are about as safe as investments get. While not technically an “investment,” these accounts offer modest returns on your money with essentially zero risk to principal.
Why consider it:
- FDIC-insured up to $250,000 per account type per bank
- Easy access to your funds
- No risk of losing your principal
- Currently offering competitive rates in 2025
Drawbacks:
- Returns typically won’t beat inflation
- Interest rates can change (variable rates)
To maximize your returns, shop around online for the best rates, as they can vary significantly between banks.
2. Certificates of Deposit (CDs)
Risk Level: Extremely Low
CDs provide fixed-rate returns on your money over a specific time period. You can get traditional CDs at banks or credit unions, or brokered CDs through investment firms.
Why consider it:
- FDIC-insured up to $250,000
- Fixed, predictable returns
- Various term options (6 months to 5+ years)
- Generally higher rates than regular savings accounts
Drawbacks:
- Your money is locked up for the CD term
- Early withdrawal penalties can eat into your principal
- If interest rates rise, you’re stuck at the lower rate
Pro tip: Consider a CD ladder strategy where you stagger CD maturities to give yourself periodic access to funds while maintaining higher interest rates.
3. Money Market Funds
Risk Level: Very Low
Money market funds are mutual funds that invest in short-term, high-quality investments like Treasury bills, commercial paper, and other low-risk assets.
Why consider it:
- Highly liquid – you can typically withdraw anytime without penalty
- Often pays better rates than standard savings accounts
- Diversification across many short-term securities
- Regular cash payouts (usually monthly)
Drawbacks:
- Not FDIC-insured (though still considered very safe)
- Returns may not keep up with inflation
- Yields fluctuate with market conditions
Ben Wacek, founder of Guide Financial Planning, notes that “The bank tells you what rate you’ll get, and its goal is that the value per share won’t be less than $1.”
4. Treasury Securities
Risk Level: Very Low
Backed by the full faith and credit of the US government, Treasury securities are considered among the safest investments in the world. They come in different forms:
- Treasury bills (T-bills): Mature in 1 year or less
- Treasury notes: Span up to 10 years
- Treasury bonds: Typically mature in 20-30 years
- TIPS (Treasury Inflation-Protected Securities): Principal adjusts with inflation
Why consider it:
- Backed by the US government
- Exempt from state and local taxes
- Highly liquid (can be bought and sold easily)
- TIPS provide inflation protection
Drawbacks:
- Lower yields compared to corporate bonds
- Interest rate risk if you sell before maturity
- Long-term Treasuries are more sensitive to interest rate changes
You can purchase Treasury securities through banks, brokerages, or directly via the government’s TreasuryDirect program.
5. Money Market Accounts
Risk Level: Extremely Low
Money market accounts function similarly to savings accounts but often require higher minimum deposits and may offer higher interest rates.
Why consider it:
- FDIC-insured up to $250,000
- Higher interest rates than regular savings accounts
- Usually comes with debit card and check-writing privileges
- Maintains high liquidity
Drawbacks:
- May have monthly withdrawal limits
- Might require higher minimum balances
- Interest rates, while better than regular savings, still may not beat inflation
6. Fixed Annuities
Risk Level: Low
Fixed annuities are contracts with insurance companies that pay a guaranteed rate of return over a specific period. They can provide steady income, especially during retirement.
Why consider it:
- Guaranteed income stream
- Tax-deferred growth potential
- No IRS contribution limits
- Can provide lifetime income
Drawbacks:
- Less liquid than other options (withdrawal penalties)
- Complex contracts that can be difficult to understand
- Return may not keep up with inflation
- Dependent on the financial strength of the issuing company
Annuities work best for people who are approaching or in retirement, value principal guarantees, and plan to use the assets after age 59½ (withdrawals before this age typically incur a 10% IRS tax penalty).
7. Corporate Bonds
Risk Level: Low to Moderate
Companies issue bonds as a way to raise money. When you buy a corporate bond, you’re essentially lending money to the company in exchange for regular interest payments.
Why consider it:
- Higher yields than government bonds
- Regular interest payments
- Bondholders get paid before stockholders if a company goes bankrupt
- Various maturity options
Drawbacks:
- Not FDIC-insured
- Risk of default (company failing to make payments)
- Interest rate risk (bond values fall when rates rise)
- Less liquid than some other options
“Bondholders are higher in the pecking order than stockholders, so if the company goes bankrupt, bondholders get their money back before stockholders,” explains Wacek.
8. Dividend-Paying Stocks
Risk Level: Moderate
While stocks are generally riskier than bonds, dividend-paying stocks from stable, established companies can provide a nice balance of income and growth potential.
Why consider it:
- Regular income from dividends
- Potential for capital appreciation
- Historically outperform non-dividend stocks with less volatility
- Some companies have long histories of dividend increases
Drawbacks:
- Stock prices fluctuate, sometimes significantly
- Companies can cut or eliminate dividends
- More volatile than bonds and cash equivalents
- No guarantee of principal
“I wouldn’t say a dividend-paying stock is a low-risk investment because there were dividend-paying stocks that lost 20 percent or 30 percent in 2008,” cautions Wacek. “But in general, it’s lower risk than a growth stock.”
9. Preferred Stocks
Risk Level: Moderate
Preferred stocks are a hybrid between stocks and bonds, offering higher dividends than common stocks but with less price appreciation potential.
Why consider it:
- Higher dividend yields than common stocks
- Dividends must be paid before common stockholders receive theirs
- Less volatile than common stocks
- May offer tax advantages
Drawbacks:
- Less growth potential than common stocks
- Interest rate sensitive (values fall when rates rise)
- Companies can suspend dividends in some circumstances
- Less liquid than common stocks
10. Cash Management Accounts
Risk Level: Very Low
Cash management accounts are typically offered by brokerages and combine features of checking, savings, and investment accounts.
Why consider it:
- Competitive interest rates
- Easy access to your money
- Often includes check writing, debit cards, and bill pay
- May automatically sweep unused cash into higher-yielding investments
Drawbacks:
- Interest rates vary
- May not be FDIC-insured (though usually protected in other ways)
- May have account minimums or fees
Tips for Building a Low-Risk Investment Strategy
-
Diversify across different low-risk investments – Don’t put all your eggs in one basket, even if they’re all “safe” baskets.
-
Consider your time horizon – The longer your investment timeline, the more risk you can typically afford to take.
-
Remember inflation risk – Super-safe investments might not keep pace with inflation, meaning your purchasing power could decline over time.
-
Match investments to goals – Use very low-risk options for short-term needs and slightly higher-risk options for longer-term goals.
-
Ladder your CDs or bonds – This strategy gives you periodic access to your money while maintaining higher rates.
My Final Thoughts
Look, I get it – nobody wants to lose money. But the harsh reality is that there’s no such thing as a completely risk-free investment that also offers decent returns. Even stuffing cash under your mattress comes with inflation risk and the risk of theft!
The best approach is to think about your specific goals, time horizon, and risk tolerance. For money you’ll need soon or can’t afford to lose, stick with the safest options like high-yield savings accounts, money market funds, or short-term CDs.
For money you won’t need for many years, consider taking on a bit more risk with a diversified portfolio that includes some dividend stocks or corporate bonds alongside safer investments.
Remember, the biggest risk sometimes isn’t losing money in the short term—it’s not having enough growth to meet your long-term goals. A good financial advisor can help you develop a personalized strategy that balances safety and growth based on your unique situation.
What’s your favorite low-risk investment strategy? I’d love to hear about it in the comments below!
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Andrea Coombes, a Bankrate editor, translates complex personal finance topics into understandable language that helps people live their best financial lives. She’s a CERTIFIED FINANCIAL PLANNER™ and over the past 25 years has worked as a financial coach, personal finance writer and editor and volunteer tax preparer. Her work has been published in The Wall Street Journal, USA Today, MarketWatch and many newspapers nationwide. Shes been interviewed on local and national TV and radio, including NPRs All Things Considered, CBS News, Nasdaq and Marketplace.
At Bankrate, we take the accuracy of our content seriously.
“Expert verified” means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced.
Their reviews hold us accountable for publishing high-quality and trustworthy content.
Bankrate is always editorially independent. While we adhere to strict , this post may contain references to products from our partners. Heres an explanation for . Our is to ensure everything we publish is objective, accurate and trustworthy. Bankrate logo
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.
Our investing reporters and editors focus on the points consumers care about most — how to get started, the best brokers, types of investment accounts, how to choose investments and more — so you can feel confident when investing your money.
The investment information provided in this table is for informational and general educational purposes only and should not be construed as investment or financial advice. Bankrate does not offer advisory or brokerage services, nor does it provide individualized recommendations or personalized investment advice. Investment decisions should be based on an evaluation of your own personal financial situation, needs, risk tolerance and investment objectives. Investing involves risk including the potential loss of principal. Bankrate logo
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo
Treasurys and TIPS
The U.S. Treasury issues Treasury bills, Treasury notes, Treasury bonds and Treasury inflation-protected securities, or TIPS:
- Treasury bills mature in one year or sooner.
- Treasury notes stretch out up to 10 years.
- Treasury bonds mature in up to 30 years.
- TIPS are securities whose principal value goes up or down depending on the direction of inflation.
Why invest: All of these are highly liquid securities that can be bought and sold either directly or through mutual funds.
Risk: If you keep Treasurys until they mature, you generally won’t lose any money, unless you buy a negative-yielding bond. If you sell them sooner than maturity, you could lose some of your principal, since the value will fluctuate as interest rates rise and fall. Rising interest rates make the value of existing bonds fall, and vice versa. Shorter-term Treasurys are a better bet if you think rates will rise in the near term.
Companies also issue bonds, which can come in relatively low-risk varieties (issued by large profitable companies) as well as very risky ones. The riskiest are known as high-yield bonds or junk bonds.
“There are high-yield corporate bonds that are low rate, low quality,” says Cheryl Krueger, an investment advisor representative at CGN Advisors in the Chicago area. “I consider those more risky because you have not just the interest rate risk, but the default risk as well.”
- Interest-rate risk: The market value of a bond can fluctuate as interest rates change. Bond values move up when rates fall and bond values move down when rates rise.
- Default risk: The company could fail to make good on its promise to make the interest and principal payments, potentially leaving you with nothing on the investment.
Why invest: To mitigate interest-rate risk, investors can select bonds that mature in the next few years. Longer-term bonds are more sensitive to changes in interest rates. To lower default risk, investors can select high-quality bonds from large, reputable companies, or buy funds that invest in a diversified portfolio of these bonds.
Risk: Bonds are generally thought to be lower risk than stocks, though neither asset class is risk-free.
“Bondholders are higher in the pecking order than stockholders, so if the company goes bankrupt, bondholders get their money back before stockholders,” Wacek says.
Stocks aren’t as safe as cash, savings accounts or government debt, but they’re generally less risky than high-fliers like options or futures. Dividend stocks are considered safer than high-growth stocks, because they pay cash dividends, helping to limit their volatility but not eliminating it. So dividend stocks will fluctuate with the market but may not fall as far when the market is depressed.
Why invest: Stocks that pay dividends are generally perceived as less risky than those that don’t.
“I wouldn’t say a dividend-paying stock is a low-risk investment because there were dividend-paying stocks that lost 20 percent or 30 percent in 2008,” Wacek says. “But in general, it’s lower risk than a growth stock.”
That’s because dividend-paying companies tend to be more stable and mature, and they offer the dividend, as well as the possibility of stock-price appreciation.
“You’re not depending on only the value of that stock, which can fluctuate, but you’re getting paid a regular income from that stock, too,” Wacek says.
Risk: One risk for dividend stocks is if the company runs into tough times and declares a loss, forcing it to trim or eliminate its dividend entirely, which will hurt the stock price. Get matched:
Preferred stocks are more like lower-grade bonds than common stocks. Still, their values may fluctuate substantially if the market falls or if interest rates rise.
Why invest: Like a bond, preferred stock makes a regular cash payout. But, unusually, companies that issue preferred stock may be able to suspend the dividend in some circumstances, though often the company has to make up any missed payments. And the company has to pay dividends on preferred stock before dividends can be paid to common stockholders.
Risk: Preferred stock is like a riskier version of a bond, but is generally safer than a stock. They are often referred to as hybrid securities because holders of preferred stock get paid out after bondholders but before stockholders. Preferred stocks typically trade on a stock exchange like other stocks and need to be analyzed carefully before purchasing.
The Best Short-Term Investments For 2025 (Where To Park Cash)
FAQ
What’s the safest place to invest your money?
- Short-term certificates of deposit.
- Cash management accounts.
- Treasurys and TIPS.
- Corporate bonds.
- Dividend-paying stocks.
- Preferred stocks.
- Money market accounts.
- Fixed annuities.
How to turn $1000 into $5000 in a month?
- Stock Market Trading. …
- Cryptocurrency Investments. …
- Starting an Online Business. …
- Affiliate Marketing. …
- Offering a Digital Service. …
- Selling Stock Photos and Videos. …
- Launching an Online Course. …
- Evaluate Your Initial Investment.
How to turn $10,000 into $100,000 fast?
What is the best investment with no risk?
- Money market & high-yield savings accounts. …
- Certificates of deposit. …
- U.S. Treasury securities. …
- Money market mutual funds. …
- Short-term bond funds. …
- Fixed annuities. …
- Dividend-paying blue chip stocks.