Examples of Low Risk Investments

Low-risk investments are more stable and safe as they are not likely to suddenly drop in value. Examples of low risk investments include bank deposits, certificate of deposits, money market funds, basic savings accounts, mutual funds, treasury bills, annuities, and blue chip stocks.

Blue Chip Stocks - Blue-chip stocks are very reliable and low risk because they are the stocks issued from highly capitalized companies with a history of rising profit and income every year.

Certificate of Deposit (CD) - It is a time-deposit product offered by many financial institutions such as banks and credit unions. Personal CD accounts typically offer higher interest rates than do business CD accounts.

Savings Accounts - These are offered by banks or credit unions and are considered low risk investments because most banks are FDIC-insured.

Government bonds - These are considered low-risk investments because the government guarantees the payment of interest during the life of the bonds, and will repay the principal amount of bonds upon maturity.

Mutual funds - Mutual fund investments carry low risk because they are diversified across major asset classes such as stocks, bonds, money market securities or a combination of these.

Money market funds - This is a type of mutual fund that is required by law to invest in only low-risk investment vehicles, but it offers lower returns than most other investments.

* Featured Articles:

Why Invest in Bonds?

Different Types of Mutual Funds

Learn About Stock Investing Risk and Forex Risk
0 comments: