Generally, interest rates on returns have not been good for years. However, if you want a guaranteed return on the investment, no hopes are lost. It is very important to note that the safest investment produces the lowest income. When investment is quite safe; there is often over looked risk that you should be curious. inflation. A very good place to invest might be having returns of 2% guaranteed. When inflation gets to 4%, you might not get anything. That is according the government website. Below are safe investments ideas.
Certificate of Deposit
This is an investment agreement between you and the bank, to pay guaranteed rates of yields when you make deposits of money over particular time. This is one of the promising investments. This is because there is no risk to loose principal amount. Moreover, they are accompanied with insurance of $250,000 in each depositor.
The terms of the CDS can vary from 10 years to 90 years. The often you deposit, leave it in the bank that is the more the return you will have. For example if you deposit $1000 today for a year, it will give you a return of $13. However, if you deposit $10,000 and have agreement to be held for 5 years, you will get a 2% yield.
High Dividend Stocks
Although it is not fixed income investment, high dividend can be regarded to be safe and has almost guaranteed return. There is the risk of principal amount with the dividends. This is due to the price in a specific share can decline anytime. However, there are good returns from reputable companies, which have a record of paying high dividends. Those stocks are:
- Coca Cola they pay dividend of 3.53%
- Procter & Gamble (PG) they pay annual dividend up to 2.94%
- Johnson & Johnson (JNJ) currently pays 2.62%
- 3M (MMM) pays annual yield of 2.62%
The Municipal Bond
This are same as American Treasury bond, only that you could be buying debt at city level and not federal level. The municipal provides a guaranteed return just like the treasury bonds. Additionally, the income is always tax-free. However, there are some things to consider.
- Municipal is a long term investment of more than 20 years
- Interest rate could be at a historic lows
That is a very toxic mix. The many years bonds go inverse to the interest rates. Therefore, clearly means that, if interest rate goes up, the price of the bond goes down. Therefore, if you plan to invest 20years municipal bonds given by your authority at 2%, in three years from today the similar bond will be at 4%. When you invest in municipal, you will be able to collect good yields, without having to lose your initial capital to market.