0
Which type of investment is low risk besides the savings account?
Wiki User
∙ 15y ago
The following are considered "default risk free" because they are guaranteed by the US Government. If you are looking for absolute, 100% ironclad security, then stick with this list. If you also value the ability to stay liquid and able to get your money at any time, then bank deposits or US Treasuries are the best, being very easy to liquidate. FDIC-insured bank deposits less than $100,000. If your savings account is in an FDIC-insured institution and it is less than $100,000, the US Government will protect you from losing your deposit. Accounts such as these include checking, savings, money market accounts, and certificates of deposit. US Treasury securities - this includes Treasury Bills, Notes, and Bonds. If held to maturity, they are protected from default by "the full faith and credit" of the US Government. You can buy these securities on treasurydirect.gov, or you can go through a bond broker. Most investment advisors can help you buy these bonds too. US Savings Bonds - you can buy these at any bank for no extra cost - these are also guaranteed by the US Government. While I'm not 100% sure, I believe there are some government agency securities, such as GNMA bonds, that if held to maturity, have always been explicitly protected from default by the US Government. In addition, recent events in the markets have led the US to explicitly guarantee bonds issued by Fannie Mae and Freddie Mac (US government agencies) but this situation is in such flux its a good idea to stay away from these. The following are not guaranteed by the US Government, but they are considered as having low risk of losing your principal. In addition, money market funds are very liquid, your money is accessible at any time. Money Market Funds - available through many investment companies such as Vanguard and Fidelity. Make sure the cost charged by the investment company is low, less than 0.3% of assets per year. No sense paying more than you have to! These funds invest in high-quality short-term securities, including US Treasuries, commercial paper, government agency debt, banker's acceptances, etc. While the risk is miniscule that you will lose money, the risk is still there. If you are searching for absolute, 100% ironclad security, stick with the options in the first section. A money market fund is probably 99.99% security. Bank deposits greater than $100,000 in FDIC insured banks. In past situations, the government has paid back depositors with deposits in excess of 100%. That doesn't mean they will do it in the future, though. Credit union deposits in highly rated credit unions, particularly those with insurance.
Wiki User
∙ 15y ago
Add your answer:
Earn +20 pts
How does the risk of a money market mutual fund compare with that of a savings account?
The risk of a money market mutual fund is similar to that of a savings account. Both are low-risk, slow-growth savings vehicles. Money market funds are viewed as a cash equivalent, similar to a savings account.
What investment has the lowest risk and lowest rate of return between savings bonds stocks collectibles or real estate?
stocks
When choosing where to invest your savings you should consider?
Before investing your savings it is important to consider the level of risk you are willing to take and your investment time horizon. A saver who does not want to take any risk with his money and wants the money immediately available for an emergency or a future planned expenditure should keep the money in an FDIC insured bank where the risk of loss is zero. A saver with a long term investment horizon and willing to take on the risk associated with higher long term returns can consider investments in stocks, bonds, or real estate.
Can return exist without risk?
Return can happen with out risk however this is generally the interest you would earn in a savings bank account. Generally, these type of investments are covered by FDIC insurance.
How is investing money different from saving money?
Investing money will earn you more money. Savings accounts actually are a slight form of an investment, but the return isn't that great. Higher risk investments (such as the stock market), have a much greater return investment-wise.
is a cd savings account a low risk investment?
A CD savings account is an excellent idea. Talk to your bank or investment representative to help you find a good percentage interest rate that will help your money grow while it's in storage, and make sure it's FDIC insured!
Is there a high risk when one is new to investments?
There is high risk when one is new to investments, depending on the type of investment they are making. If it is a savings account, or a government bond, there is less risk than opposed to shares and options.
Which form of investment has the most amount of risk involved savings account or checking account or mutual fund?
Out of the three options, a mutual fund has the most amount of risk involved. While a savings account and checking account typically have very low risk, mutual funds are subject to market fluctuations and can experience losses. The level of risk in a mutual fund depends on the types of assets it holds, such as stocks or bonds.
How does the risk of a money market mutual fund compare with that of a savings account?
The risk of a money market mutual fund is similar to that of a savings account. Both are low-risk, slow-growth savings vehicles. Money market funds are viewed as a cash equivalent, similar to a savings account.
what are some investment strategies?
Investment strategies depend on liquid and how safe you want your investment to be at risk. A bank savings account is most liquid and very safe, as are money market accounts, and CDs. At risk investments would include bonds, stocks, mutual funds, and properties but they often can yield a much higher profit (yet there is a much greater risk and no profit is guaranteed).
Is a checking account a high risk investment?
Not at all it's probably one of the lowest risk investment you could make , but it couldn't be a bad idea to check the bank in which you open your account .
What is high interest savings?
This would be a type of savings account that held your money in a higher interest bracket than a traditional account. There could be higher risk, however.
What investment has the lowest risk and lowest rate of return between savings bonds stocks collectibles or real estate?
stocks
What is a certificate of deposit?
When you put money in a savings account, you can draw it out at any time. In a certificate of deposit, you agree to leave it in the bank for a certain period of time. They pay slightly higher interest because they know that money will be there for 3 months, 6 months, 1 year, etc. If you draw it out early, they reduce your interest.
What are the factors that investor keep in consideration while preferring investment in stock over savings?
The higher risk involved in investing in stock. He should also keep in mind the time horizon of investment, as investment in stocks is considered as long term investment.
Mutual Fund vs Savings Account?
Return rates on mutual funds are traditionally much higher than those on a savings account. Users are however taking more of a risk with mutual funds. The amount of risk can be measured by a number of things - including volatility.
What is desired investment?
Desired investment is a sum of money that a person is willing to risk in order to make more money. Desired investment is also a sum of money that a person might put away for the future using a 401K Savings Plan.
