As a financial investor, you want to get the highest return for your investment. Some may say low risk, low reward, but there are in fact some options for those who would prefer to invest with less risk involved yet get a better, more solid return in the long run. Whether you're a novice when it comes to financial planning or you'd just like some security on the money you're planning to put in, here are some options to consider when you plan for your financial future.
CDs (Certificates of Deposit)
A certificate of deposit is one of the oldest and most tried and true ways to safely invest your money. Simply put, these can be purchased through your local bank, your financial adviser, or your credit union. You'll need to determine the amount you'd like to deposit, and then wait for that deposit to mature until the money can be withdrawn. The money will earn interest, earning you a guaranteed return as long as you wait for it to fully mature. It is important to find a CD with the highest rate so that you will get the most for your money. Keep in mind that, with CDs, the amount of time required for full maturity varies, so gather all information before you invest.
If a local or state government is in need of money, it turns to bonds to raise funds. Municipal bonds are monies lent by investors to the government at a small rate of return. While you won't become rich using bonds for investments, you are guaranteed a return with very little or no risk of losing anything. Bonds are also great because there is no income tax charged on your profits. Savings bonds are another option and also guarantee a profit based on interest rates. Check the current rates before investing in either municipal or savings bonds, so you're getting the most amount back possible.
Peer to Peer Lending
A new way of investing includes something called peer to peer lending. This newer way to invest involves people lending their money to individuals who may need a loan for anything from home improvement and medical expenses to help with paying off credit cards. Based on the applicant's credit, the investor can choose to lend their own money to the person at a certain rate of interest. This type of lending definitely comes with more risk, so it's important to carefully screen applicants before you lend your hard-earned money to them. If they do pay it back, however, you can garner a much better return rate, sometimes as high as the 4-9% range.