As part of a balanced portfolio, low-risk investments are essential. Without risking your cash, they can give you a steady stream of profits, albeit lower. When the stock market is turbulent, these investments allow you to sustain your investment growth without worrying about it crashing. A financial adviser can help you place your money into more profitable instruments if you can afford to invest for a more extended period.
Money market instruments with minimal volatility are examples of low-risk investments, as are investments in cash that receive a set rate of interest. Consult with a financial advisor to determine what is best for you based on your risk tolerance and investment goals.
High-interest Savings Account
If you want to invest in something secure, go no farther than a savings account, which pays little or no return. However, some emerging participants on the financial scene may offer interest rates as high as 2 percent per year for high interest or high yield savings accounts.
Guaranteed Investment Certificate (GIC) or Term Deposits
They're just as safe as savings accounts because your money isn't a danger, but they're also not as liquid as savings accounts. A set rate of return is provided over a specified period. However, while they may offer better rates than savings accounts, you'll also be committing your money to them for a specified length of time, or "term," which may range from 90 days to as long as five years in duration.
Money Market Refunds
This type of investment invests in good quality, short-term government and business bonds, which keep your money liquid at all times. Unlike savings accounts or GICs, they are not insured by the CDIC in the event of a bank failure. Those money market funds are being replaced by other assets that offer greater returns and cheaper fees since their returns seldom exceed the costs of keeping them.