Deposits have always been considered as one of the safest forms of investments when an economy is in a state of recession. Following are some of the safer sources through which one can invest in order to save and increase their wealth.
Government Bonds: One of the safest investment ventures is in government bonds that are government guaranteed. US treasury bonds are one of the most safe security since government of the US as never renege on its debt. These bonds consist of a fixed interest rate during a predefined period.
Certificates of Deposit (CDs): CD products are like the deposits made in a bank for a given time at a fixed interest rate. They are therefore insured by the FDIC up to $250, 000 per depositor and therefore deemed as a low risk investments. But withdrawals may attract penalties in case they too are made in early stage.
High-Yield Savings Accounts: Money market accounts come with higher interest rates than regular savings accounts and they are FDIC insured. A bank offers a low rate of return that is coupled with the security to keep your money there and the option to make frequent withdrawals.
Municipal Bonds: Being government municipal bonds are very safe and you get tax benefits. It should not be overlooked that they are especially attractive if one is an investor in a higher tax bracket because the interest income derived can be excluded from federal income taxes.
Dividend-Paying Stocks: The companies however offer safety to those who buy the stocks though normally the stocks come with higher risk as compared to other companies. These stocks fetch fixed and/or largely variable rates of dividend and have possible capital gains but are more risky than fixed-income securities.
Treasury Inflation-Protected Securities (TIPS): TIPS are U. S. Treasury notes or bonds issued with anti-inflation features. They pay their principal value twice a year with the interest rate and the amount of growth affected by inflation as measured by the CPI.
Money Market Funds: These funds place their money in short-term assets with high-quality ratings from the issuing government or corporate bodies. Their purpose is to provide investors with more profitable yields than in saving accounts and to have a high liquidity rate and a low degree of risk.
The following safe investment options should be added to your portfolio to increase your chances of becoming financially stable and secure. These investments may not yield high returns as compared with those high-risk ones, but the security associated with these choices coupled with a guarantee of predictable and reliable income makes them good choices for protecting the capital.