Skip to main content

Are Low-Risk Investments Right for You?

You've worked hard all your life, and through saving and smart investing, you have built wealth and achieved financial flexibility. Now you're looking for smart ways to protect your hard-earned money and secure your future.

Most investors understand that with higher returns come higher risk and, conversely, lower risk options produce smaller gains. So, why would any investor want to go with low-risk options if they're not going to pay well?

Essentially, low-risk choices can make sense when –

  • ​You have saved funds you haven't yet earmarked for anything specific
  • You have more significant expenses coming up in the next few years and want to be sure you can cover them
  • You want to balance your investments in stocks and bonds with more stable assets
  • You're getting close to using your savings goal, e.g., your child is going to college, or you're nearing retirement

For any of these reasons, low-risk investments may not significantly increase your wealth, but they will give you more peace of mind. Consider these options:

High-rate savings accounts protect your money

Savings accounts are not technically an investment. But you will have easy access to your money and earn a small return. Look for the highest rates you can find and low-to-no fees.

Because of the low rate, you won't want a lot of your money tied up in them. A reasonable size savings account ensures you always have a buffer on hand. Some people will set up savings accounts earmarked for specific short-term goals, like a vacation or Christmas gift giving.  

A little more return, a little less access 

The next “step up" from savings accounts in terms of return is a money market account. A money market will pay a higher rate and still allow you to access your funds. But that access isn't unlimited. The federal cap is six withdrawals per month, and your credit union or bank will have set its own limit. Like savings, money market funds are federally insured.

Money market accounts are ideal for stashing away money for an emergency or when you have bigger expenses coming up over the next several years.

Guaranteed rate, guaranteed term

Share Certificates*, pay a guaranteed, fixed interest rate for a specific term, typically 6 months up to 6 years. The longer the term, the higher the rate. The catch here is if you cash out early, you will pay a penalty.

Share Certificates​ are an excellent place to park money for something you will need in the future or to put some balance in your investment portfolio.

You're unique – discover what works for you!

While low-risk investment options can make sense in some situations, they won't work in all. What investments will help you get where you want to go? A professional financial advisor can help you craft an effective strategy taking into account your life goals and comfort level with risk—helping to make it easier for you to live the life you want to live!

*CD's issued through a credit union are called Share Certificates.