No-risk Investment Strategies for New Investors

The “best” no-risk investment strategies depend on one’s financial goals, timelines, and how much of a risk they can afford to take. While no investment is completely without risk, there are options that are considered extremely low risk. Some choices are:
- High-Yield Savings Accounts: These accounts offer interest rates higher than traditional savings accounts but are FDIC insured, making them very low risk.
- Certificates of Deposit (CDs): CDs provide a fixed interest rate if you keep your money deposited for a specified period, typically ranging from a few months to several years. They’re also FDIC insured.
- Treasury Securities: U.S. Treasury bonds, bills, and notes are backed by the U.S. government and are considered virtually risk-free. They offer fixed interest rates and can be purchased directly from the U.S. Treasury or through a broker.
- Money Market Funds: These funds are invested in short-term, low-risk securities such as Treasury bills and commercial paper. They aim to maintain a stable $1 net asset value (NAV) per share and are considered very safe.
- Municipal Bonds: Issued by state and local governments, municipal bonds are usually considered safe because they’re backed by the government’s ability to tax. They offer tax advantages for certain investors.
While these options provide relatively low risk, they may offer lower returns compared to riskier investments like stocks or real estate. It’s essential to assess your financial goals and risk tolerance when choosing the best investment strategy for you. Additionally, consulting with a financial advisor can provide personalized advice based on your specific situation.