By Rashmi Goel

Balance is the key to successful investing. As the global economy faces unprecedented challenges, many savers seek to reduce their exposure to risk. There is no doubt that the investment return you can expect depends on how much risk (and loss) you are willing to accept, but great investors have mastered the art of balancing these forces. This guide offers a range of options for long-term investments based on zero, low or medium risk, although we cannot decide for you how much risk you are willing to take. There are a number of options available that carry no risk, such as switching banks and taking advantage of a bonus or switching to a higher-yield savings account. There may be additional learning or planning required for other options. For anyone considering investing, just get started small because action leads to learning faster. A "Robo-advisor" can help you invest in a variety of asset classes easily.

Long-Risk Investments That Require Zero Risk-Taking

Take Advantage Of The Bank Bonus

Occasionally, you can earn free cash with a bank bonus from one of the nation's best banks if you have some extra money you are not likely to need for a while. The majority of banks will offer you a bonus as an incentive to sign up, and these bonuses can be worth several hundred dollars on their own. It is important to note that bank bonuses may be regional and that they may vary based on the products offered by the local banks in your area. The bank b,onus may require the use of a bank-issued debit card for a certain number of transactions within the first few months in exchange for the bonus. You can typically earn a few hundred dollars for your efforts by jumping through these hoops. The best part is that you are not at risk of losing any of your deposits. In the event that you do not wish to maintain the account over the long term, you can always close it after earning the bonus and meeting all the requirements of the bank.

It's A Good Idea To Save Money In A High-Interest Savings Account

When it comes to earning interest on your money without taking on any risk, a high-yield savings account may be the best choice. By retaining your money in these accounts, you will earn a modest interest rate. This strategy requires almost no effort from you other than opening an account and depositing your funds. It is crucial to choose a high-yield savings account that offers competitive interest rates without any fees.

Sign Up For An Online Checking Account

Similar to savings accounts that offer high rates of interest, online checking accounts also offer small rates of interest. Since you will be storing your funds in a bank anyway, it is likely that you will appreciate the opportunity to earn interest. Furthermore, many online checking accounts are free of charge or charge minimal fees in order to open an account.

Boost Your Credit Card Rewards

There is no such thing as a devil when it comes to credit cards. Every person spends money on a credit card, and when used properly, it allows the user to earn cash back on their purchases. Credit cards that offer cash back allow you to earn "points" that can be converted into actual cash. A Certificate of Deposit or an online savings account won't earn you nearly as much interest as some of the top credit cards. For example:

You will receive 5% back on cable, internet, and cell service, as well as at Amazon and Target
You will receive 3% back on dining and travel
You will receive6% back at the grocery store
You will receive2% back on gas

Suppose you obtained a Platinum Card® from American Express and deposited your regular spending on it to qualify for the signup bonus. You would earn 60,000 points worth $750 in travel once you spent $4,000 on your credit card in 90 days ($600 in gift cards or cashback). It would be the closest thing to "free money" if you spent that $4,000 on bills that you would normally pay like groceries, daycare, or utilities, and then paid the card off immediately.

Investment Options With The Lowest Risk

An Investment Certificate

The Certificate of Deposit is the most boring investment you'll ever find. An Interest-Guaranteed Certificate of Deposit (CD) is an investment contract in which you deposit your money for a specified period of time in exchange for a guaranteed return regardless of interest rate fluctuations. Consider purchasing your CD from a financial institution that is FDIC-insured (the maximum amount insured is $250,000. The interest rate paid by the financial institution depends on the duration of the CD.

Account For Money Market Funds

An investment account designed for people who don't want to lose their principal is a money market account. As an added benefit, the fund also pays interest on your deposits so that parking your money with the fund is worthwhile. Funds must maintain a net asset value (NAV) of $1 per share in order to maintain a $1 per share net asset value. It's important to note that these funds are not foolproof, but their history shows they guard the value of your cash well. The NAV can drop below $1, but it is rare. If you own money market funds, you can place them with a broker such as TD Ameritrade, Ally Invest, or E*TRADE or with a bank that offers high-interest savings accounts. Even though you may not earn much interest in your investment, you will not have to worry about losing a substantial amount of your principal or the day-to-day fluctuations in the market.

Securities That Are Inflation-Protected By The Treasury (TIPS)

There are several types of bonds offered by the US Treasury. A Treasury Inflation Protection Securities, or TIPS, is one of the lowest risk investments available. There are two ways in which these bonds can grow. In the first case, the interest rate is fixed for the entire term of the bond and does not change. Second, the government guarantees inflation protection. Investing in TIPS today, for example, would only earn you 0.35% interest. It's lower than the certificate of deposit rates and even basic online savings accounts. Inflation may not seem very appealing at first, but if it grows at 2% per year over the life of the bond, then your investment value will increase steadily with inflation, giving you a higher return on investment. Investing in TIPS can either be done individually or through an investment fund that invests in a basket of TIPS. In contrast, the latter option offers you the ability to choose specific TIPS that you wish to invest in, while the former allows you to manage your investments more easily.

US Savings Bonds

As with Treasury Inflation-Protected Securities, USSavings Bonds are also backed by the United States Federal Government. Defaults on this debt are very unlikely, which makes it a very stable investment. Series I bonds are composed of two components: a fixed interest rate return and an inflation-linked return. Because they include an inflation adjustment as part of the total return, they are somewhat similar to TIPS. There is no change in the fixed rate, but the inflation return rate is adjusted every six months (which means you would have a negative return). The interest rate on Series EE bonds is just a fixed rate that is automatically added each month. It is estimated that your investment will generate a return of approximately 3.5%. Early withdrawal fees will apply if you do not hold the bond to maturity. There is also the possibility of excluding some or all of the interest earned from your taxes if you use EE bonds to finance your education.

Annuities

Some investors find annuities unsuitable for their financial goals due to over-promotion of them by shady financial advisors. It is important to note that annuities do not have to be scary things; they can be a great option for certain investors who need assistance stabilizing their portfolios over a long period of time. It is important to speak with a good financial advisor before purchasing an annuity if you are interested in them. It is important to understand that annuities are complex financial instruments with many traps. Ensure that you fully understand your annuity before signing on the dotted line. The purchase of an annuity is similar to making a trade with a company of insurance, as there are several types of annuities available. The company is taking a lump sum of cash from you. This is in exchange for a stated rate of return that is guaranteed. It is possible to obtain a fixed return (with an annuity), a variable return (with an annuity), or a return that is determined in part by the performance of the stock market and offers downside protection (with an equity-indexed annuity). Your risk is significantly reduced if you receive a guaranteed return. As opposed to the backing of the federal government, your annuity is backed by the insurance company that holds it (and perhaps another company that insures it further). In spite of this, your money is likely to be very safe in these complex investments.

Investing In Cash Value Life Insurance

Life insurance with a cash value is another controversial investment. Life insurance products such as this one not only provide death benefits to your beneficiaries after your death (just as term life insurance policies do), but also allow you to invest part of your payment to accrue value. There are two types of cash value life insurance: whole life insurance and universal life insurance. Though term life insurance is by far the cheapest option, it only covers your death. Cash value life insurance offers many benefits, including the ability to borrow against your accrued value at any time during your life without paying income taxes. There are some people who may not be interested in cash value life insurance, but it is a smart way to pass some value onto your heirs without triggering income taxes on either side.

Investments With Medium Risk

Investing In Real Estate Through Crowdfunding

Interested in investing in real estate but dread becoming a landlord or home prices in your area are too high? Real estate crowdfunding may be the answer! A new trend in real estate crowdfunding emerged after Congress passed the 2012 Jobs Act, which allowed real estate investors and developers to raise funds from the public to fund their projects. Consider the case of a developer who is planning to build a 200-unit condominium in Las Vegas. Previously, he could only raise funds from private investors within his network. However, today he can list his project on a platform that allows anyone to invest in real estate crowdfunding. In a similar manner to Lending Club, Fundraiser provides access to real estate investments. In order to minimize risks and increase interest, they carefully vet the projects they invest in.

Investing In Stocks And Etfs Paying Dividends

Stocks or mutual funds with nice dividend payouts are a great way to increase the return on your stock investments. Suppose two stocks perform exactly the same during a given period of time, but one does not pay dividends while the other does so at a rate of 3% per year, then the latter would be a more prudent investment. By investing in dividend stock mutual funds, the fund company targets stocks that pay nice dividends and does all of the work for you.

Investing In Corporate Bonds

The government does not guarantee corporate bonds, as opposed to U.S. Treasury bonds. A corporate bond is actually debt security between an investor and a corporation, which is backed by the company's ability to repay the funds with future profits or use its assets as collateral. Due to the risk involved in investing in a company, returns on corporate bonds are higher than other types of bonds, regardless of the company's reputation. For many investors, that is reassuring enough, however, if you are seeking a low-risk corporate investment, you should consider bond funds. A bond fund can be a mutual fund or an exchange-traded fund, and it helps to diversify your investment across a number of bonds.

Investing In Municipal Bonds

Governments at the state or local levels do not use credit cards to borrow money. Municipal bonds are issued instead by government entities. Tax-exempt municipal bonds, also known as munis, make a good investment for people who want to minimize their tax exposure. Why are municipal bonds so safe? There is very little risk of the borrower defaulting, so you are not only avoiding income tax (as compared with an equally risky investment that is taxed). It has been rare for municipalities to file for bankruptcy in recent years. Taxes can always be raised or new debt issued to repay old debt, so municipal bonds are fairly safe investments.

An Investment In Preferred Stock

Preferred stocks are another addition to the dividend stock theme. Companies issue preferred stock, which is a type of stock that has both equity (stock) and debt (bond) components. In terms of dividends paid to investments, preferred stock is positioned between bond payments (which come first) and common stock dividends (which come last). Compared to common stock, preferred stock does not trade nearly as heavily, but it is less risky. Dividends are another way to own shares in a company and receive dividends.

Conclusion

As It is important to reduce your risk as much as possible as you approach retirement. The last thing you want is to lose capital at this point in the game; since you will be retiring soon, you should preserve your capital. You can achieve this goal by investing in the best low-risk investments. In order to keep your nest egg in line with inflation without losing your shirt, it is important to allow you to earn nominal rates of interest on your money while assuming little risk. If you have questions about an investment product or service, speak with a financial advisor.