Four Low-risk Investments That Still Have Reasonable Return Rates in 2019

With the stock market becoming increasingly volatile, many people are starting to look for alternative low-risk investments for their money. At the same time, though, it’s important to continue realizing a respectable return on your money. Fortunately, there are several relatively safe investment options that offer decent rates of return. Here are some of the best safe investments that will still get you a reasonable return rate in 2019.

Money Market Accounts

Money market accounts are standard bank deposit accounts that pay rates of interest much higher than normal savings accounts. Several money market accounts offer interest rates that exceed 2 percent, making them a reasonable hedge against inflation. Unlike investment accounts, money market accounts are eligible for FDIC protection, making the risk level of these accounts quite low. Money market accounts also offer some limited withdrawal and check-writing capabilities, a fact which makes them preferable to more restrictive certificates of deposit for people who many need higher levels of liquidity.

Municipal Bond Funds

Bonds issued by municipalities can be very good investments, though it should be noted that any bond does involve at least some risk of default. In the area of low-risk investments, municipal bond funds offer some of the highest return rates, with many funds yielding 4-6 percent annually. Municipal bonds also have the significant advantage of holding tax-preferred status. Interest earned on municipal bonds is typically exempt from federal taxation. In most cases, bonds bought from municipalities in the state in which you live are also exempt from state taxes.

Certificates of Deposit

For many years, certificates of deposit offered interest rates so low that most investors had no use for them. Over the past couple of years, though, the rates offered by CDs have crept back up, making them worthwhile once again. Today, the highest yielding CDs offer annual returns in excess of 3 percent. It’s important to note, though, that these are long-term CDs which often mature 5-6 years after the initial deposit. Short-term CDs offer considerably lower interest rates. If you have excess cash that you want to protect from inflation and don’t mind not being able to access for several years, though, long-term certificates of deposit can give you a respectable interest rate at a very low level of risk.

US Treasuries

If you want to invest in debt but aren’t comfortable with municipal bonds, US treasury notes and bonds may be a good compromise for you. These instruments represent debt owed by the United States federal government itself. Although it is still hypothetically possible for default to occur, US treasuries are considered to be among the safest investments in the world. Yields on these bonds vary, but typically fall within the 2-3 percent range. Treasury debt instruments also have widely varying maturation dates. Some notes mature within a single month, while the longest-lived bonds take 30 years to mature. These four investments will allow you to earn a respectable interest rate on your money without exposing it to the volatility and risk of the stock market. Keep in mind that you may want to invest in more than one of these options in order to create a more diversified portfolio.