Safe Investments Protect and Grow What You Have
Pretty much every investment has some kind of risk level, whether it is very low or very high. Usually high-risk investments have a high return, and low risk investments have a lower return. While high-risk investments do have a greater return, you also have a higher chance of losing money rather than gaining a profit. Going with a low-risk investment won’t get you as big of a profit, but you have a much lower chance of losing money. The primary goal of low-risk investments is to protect what you have rather than earn a high return.
You have to decide for yourself what kind of risk you are willing to take. Following are a few types of low-risk investments that are considered safe:
Savings Account Tip: Make sure your savings account is at a federally insured financial institution. Banks should be insured by the Federal Deposit Insurance Corporation, and credit unions should be insured by the National Credit Union Administration. This will ensure that your money is safe guarded in case your financial institution goes out of business.
Certificates of Deposit
Certificate of Deposit Tip: If you are going to invest in a Certificate of Deposit, make sure you can commit to the full amount of time. If you cash in on your investment before the maturity date, you may have to pay a penalty and forfeit some of your profit.
Watch this short video produced by our member, Lakota Federal Credit Union, to find out more about Certificates of Deposit.