Low-Risk Investments

Even in a rocky economy, stuffing the money under the mattress is never the answer. Your only rate of return is the feathers from the stuffing, and you risk its total loss in the event of a break-in. The local bank can offer you FDIC guarantees on your investment, but little profit. If you are willing to do a bit of research and invest your money wisely, you can do much better than the 3 percent you might be able to get from a savings account.

A Home: Your Biggest Investment

For most people, their home is the biggest investment they will ever make--and it is one of the safest. If you consider investing as a long-term proposition and can obtain and maintain a fixed-rate mortgage, you will see your property easily double in its value. Even in a down market, real estate is option number one for high return with minimal risk. However, you have to be willing to wait and understand that you only reap profit upon the sale of your property.

The U.S. Government

There may be nothing flashy about buying bonds, but the action has the benefit of being risk-free and more profitable than placing money in a savings account. In fact, if you invested prior to May of 1995, you could be earning as much as 6 percent. Not bad for no risk. A bond is essentially a long-term (10 years) investment in the federal government. Because bonds are insured by the federal government with a guaranteed rate-of-return, they are considered no-risk. To purchase a bond, one need only identification, investment money and the means to an area bank. You can purchase a bond directly at your local bank or from the Treasury Department at the below website.

Certificates of Deposit

Another safe investment to consider is a certificate of deposit. These investment tools are promissory notes in which investors are guaranteed a certain return on their money by agreeing not to withdraw the money for a stated period. While the yield of a CD can be relatively small, your investment is guaranteed by the bank and insured by the federal government. Both your principal and your interest are guaranteed. CD's can be purchased at local banks. To assure the best rate-of-return, consult your local newspaper for current rates and terms or look to a website like the one below that offers the best CD rates.

Mutual Funds

While shouldering some of the risk of the stock market, mutual funds are generally considered a safer alternative with less volatile exposure. Because mutual funds represent not one company, but many, and are administered by investment professionals, they are considered safer investments. However, mutual funds, unlike CDs, bonds and bank accounts, are not protected by the FDIC. Your money is at risk, just less so than many other investments. Research individual funds to study their past performance and future projections.

The Stock Market

When the stock market takes a nose dive, the naysayers run and point to all the risk and none of the rewards. However, historically, the market performs quite well. If you placed a dollar in the market in 1997 and had the wherewithal to take it out in 2007, you could have nearly doubled your money. Unfortunately, individual stocks can be quite risky. One way to gain the benefit with less of the risk is to invest through ETF's (Exchange Traded Funds), which are not reliant on a single stock, but rather run parallel to stock indexes.

Resources

• Treasury Bonds
• CD Rates and Terms