5 Low-Risk Investments for Beginners

Are you looking to grow your money with as low risk as possible as a beginner?

It is best to invest in lower-risk opportunities that are easy to get started with, especially if it is your first investment.

Or it is possible that this type of investment suits your personality. But whatever the case may be, there are many low-risk investments that you can choose from.

But remember that low-risk investments are going to earn you lower returns. A low-risk option is best suited for short-term investment or your emergency fund.

Here are 5 low-risk investments for beginners to grow your money without the risk of incurring heavy loss:

Government bonds

Government bonds will give you a slightly better interest rate as compared to a savings account. Plus, it is one of the best low-risk investments out there.

The interest rates offered by government bonds start from 0.09% for a month up to 1.23% for 30 years.

U.S. Treasury issued bonds are backed by the full faith and credit of the government of the US, making it reliable and easier to purchase and sell on secondary markets, just in case you want your money prior to the maturation of debt.
Note that government bonds may earn you lower returns as the debt is going to be paid back.

Certificates of deposit

Certificates of deposit carry no risk as they are insured by the FDIC. But this is only true if you let the money mature.

If you allow the CD to mature, the bank will pay you a set rate of interest over the specified term.

You can go online and compare the rates that banks offer to settle for the best. There are also online tools out there to help you choose an investment. Some banks offer higher rates of interest as compared to some CDs, but high-yield accounts usually ask for a large deposit.

The risk involved in CD is that if you decide to take out the funds, the bank will cut some of the interest you earned. Some banks will even take a portion of principal too.

Read and understand the rules and double-check rates prior to buying a CD.

High-yield savings account

This type of investment is best for stashing money into your emergency fund and for investors eyeing safe investment options.

Here, your investment is 100% secure as savings accounts are FDIC-insured. The FDIC will cover losses up to $250,000.

Usually, this type of savings account offers a 2% guaranteed return. And with no risk involved, 2% returns is a good deal.

Besides, it is a liquid investment. Whenever you need access to your money, you won’t be fined.

Saving pound coins

Fixed Annuities

In this type of investment, investors can pay an upfront lump sum in return for a series of payments made over time. Just like certificates of deposit, here you make an agreement to restrict access to your money for a set period of time. In return, you receive an interest rate that is higher than average.

As of August 2018, here’s the list of the fixed annuity interest rates for each term:

But be very cautious as insurers who default payment often offer higher interest rates.

The risk associated with this type of investment is that you may incur penalties if you decide to remove all of your money before it matures. However, each month, you can gain penalty-free access to a percentage of your cash.

Money market account

A money market account is more or less like a savings account. It offers benefits such as a debit card and interest payments, but you will be required to deposit a higher minimum as compared to a savings account.

Interest rates are higher on money market accounts than comparable savings accounts. You will also be allowed to spend the cash if required though there is a monthly cap on withdrawals just like a savings account.

This type of investment presents no risk to your principal. They are FDIC-protected and will cover losses up to $250,000 per depositor.

When you are a beginner, learning how to manage your investments will also benefit you.


With so many investment options out there, it may sometimes be confusing as a beginner as to where to make your investment. Hopefully, this article will help you to make the best choice. You can also use the best investment research platform to make your investment research process even more accessible.

This article is for information and educational purposes only and does not form a recommendation to invest or otherwise. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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