If it is your first time to get into the ball of investing, chances are you are leaning towards low risk investments. Investing is putting your resources into something that you believe will be able to give your returns and profit in the long run.
But if you want to take things slowly and surely, there are a lot of low risk investments out there.
Here are 10 low risk investments that you can try.
1. Savings account
You have the funds but due to your need, you cannot dive into high capital investments. When you are in a situation like this, a savings account is your partner to a small time investment.
Different banks offer different annual interest rates ranging from 3-5% per annum.
The good thing about savings account is that you can withdraw your money anytime. If you want to spend or invest into something, you can just go to the nearest ATM and your money will be ready for you.
2. Treasury bonds
In essence, this is like providing the government money to finance its projects. Treasury bonds are effortless investments and the only thing that could affect the interest your money will earn is inflation.
3. Preneed Plans
Pay small monthly contributions for your future kids education even if you do not have a child yet. If you do the math, these monthly contributions are cheap and the idea of a big payment divided into small chunks will not hurt your pocket.
4. Buying preferred stocks
Preferred stocks have higher dividend yields than normal common stocks. Preferred stocks are low risk- high yielding investment but a maximum profit is set for a certain amount of investment.
5. Peer to peer lending
This is letting the people you know borrow money from you at a very low interest rate. This investment is common in small organizations.
6. Short term investment fund
You can only do three things with money: spend, save or invest. While you are thinking which one to do, you may invest it in a short term investment fund.
Short term investment funds are avenues where investors can place their money before moving it to a venture that could generate higher interest.
7. Cash value life insurance
This love risk investment allows insurance policy holders to contribute premium on top of their insurance coverage. The additional money policy holders pay will gain interest and will be given to the beneficiaries when the policy holder dies.
The premium payment is not subject to income tax so the premium is passed on complete plus interest without income tax.
The government uses bonds to raise money. Bonds are sold to investors and are paid back in full plus a pre-set interest after a full term.
9. Time deposits
If you can foresee that you will not need your funds for the next 3 months or three years or so, place it in a time deposit account. Time deposit accounts usually give higher interest rates compared to savings and checking accounts.
Your money has to stay in the back for quite some time so that the bank can use it to finance its operations.
10. Certificate of deposit
Just like time deposit but your money is converted into a certificate. You will have to en-cash the certificate to get your money after the maturity date is reached.