Every investor is chasing a high return, but it is not the only factor. Professionals are not only considering total returns but also a 'risk-adjusted return' in their investment analysis. Not all returns are equal, and intelligent investors choose to invest where they have the highest value for the risk they take—even if this means accepting lower returns. In this article, we have listed safe investment options with high returns in the USA.
High-Yield Savings Accounts
The high-income saving account is almost the gold standard of safe investments and offers you significant profits in the absence of any risk. You insure the Federal Deposit Insurance Corporation for practically all banks' money, so the government will make you fully rewarded on losses over $250,000.
One of the few hits with high yield saving accounts is that the rate can vary in light of current market conditions. As rates drop in recent years, payouts may not seem enticing when rates decline.
A 0.50 percent interest rate is currently paid on the high-yield savings account far from 2 percent – higher than a few years ago. However, the national average savings rate of barely 0.04 percent still stands for high-income savings accounts.
Certificates of Deposit
The savings accounts are very similar. Most of them are FDIC insured, and hence the risk is zero. They're still liquid, however.
You agree to a time horizon with a CD when you invest – generally for up to 10 years from one month – and you have to pay the penalty if you have access to your money in advance. That means CDs for the emergency fund or savings are far less valuable, on the one hand.
Money Market Accounts
These accounts work on a CD or savings account based on similar principles. They usually offer better savings rates but are also more liquid and can even allow you to write checks or use a debit card with your account to make your savings account more efficient.
For example, the MMA could be excellent if you use the account to make deposits and write a monthly rental check. However, it has to do with the return, so shop around and compare the possibilities not just with other money market accounts but also with CDs and high-yield currencies.