7 Best Low-Risk Investments (2022)

Markets are highly volatile, and the Federal Reserve is raising interest rates. Banks may soon boost average percentage yields (APYs), but the average savings account still pays about 0.06 percent APY. Check out our list of seven low-risk investments to grow your money safely.

These seven investments can help you increase your returns faster than the average bank account. However, keep in mind that, while these are low-risk investment opportunities, they are not risk-free. To maintain better financial performance, ensure you have an emergency fund that is fully stocked before investing any extra money you may need.


1. Treasury Notes, Treasury Bills, and Treasury Bonds

If you want to earn a slightly better interest rate than a savings account without much additional risk, your first and best option is government bonds. Treasurys yield 2.22% for one month, up to 2.93% for 30 years.


2. Corporate Bonds

If you’re willing to accept slightly more risk for higher yields, high-grade corporate debt might be a good option. These bonds—issued by established, high-performing companies—typically offer higher returns than Treasuries or money market accounts. 


3. Money Market Mutual Funds

Money market mutual funds invest in overnight commercial paper and other short-duration securities. Even the best money market funds typically offer a next-to-no yield. Unlike Treasury products and corporate bonds, however, money market funds do offer investors absolute liquidity: 


4. Fixed Annuities

Fixed annuities are annuity contract that allows investors to pay a lump sum upfront in exchange for a series of payments over time. Functionally, fixed annuities work a lot like certificates of deposit: You agree to lock up your access to your money for a set period, and you get a higher than average interest rate in exchange.


5. Preferred Stocks

Preferred stock works like a hybrid of stocks and bonds: It offers some potential for the appreciation you get from common stocks while also providing dependable income payments of bonds. Preferred stock frequently offers higher dividend payments than companies’ bonds because, unlike bonds, payment is not entirely guaranteed.


6. Common Stocks That Pay Dividends

Outside of preferred stock, some common stocks are also relatively safe options for those after a higher yield in this low-interest-rate environment. Chief among these are real estate investment trusts (REITs) and utility stocks, historically viewed as safer, less volatile, and more reliable in dividend payments.


7. Index Funds


Index funds allow you to invest hundreds or thousands of individual stocks and bonds. This dramatically decreases your risk when investing while offering high interest or dividend rates. Diversified, higher-rate funds include PIMCO’s BOND fund or Vanguard’s BND or VDADX funds.