Which Investment Type Typically Carries The Least Risk?

Nowadays, who doesn’t want to achieve a more prosperous financial future? Thankfully, there are many ways they can achieve their financial goals. However, when it comes to investing, people want to bet their money on the safest investment type. Indeed, nobody likes losing money. The idea is to create wealth over time. By investing your money, you can achieve that.

Before we continue, it is essential to note that there is a big difference between investing and saving. Usually, investing means buying stocks, bonds property, shares in a fund, etc. because you believe they will increase in value. Investing indeed has the potential of doubling or tripling your money. However, you take on the risk of loss if the investment doesn’t pan out. 

On the other hand, saving is the act of depositing money in a low-risk bank account. Typically, saving carries less risk than any other investment type. According to reputable investors, the least risky investment is probably the high-yield savings account. Usually, this type of savings account has interest rates 20 times higher than the national average of a standard savings account. 

High-Yield Savings Account 

Regardless of your current financial situation, you can always start saving money for the future. In fact, this should be a priority, especially when it comes to high-yield savings accounts. Moreover, the great thing about high-yield savings accounts is that they offer high APY and are federally-insured. 

Nowadays, many Americans hold their primary checking account at a major U.S. bank. Currently, the national average is 0.09% APY. So, does this sound like a reasonable savings rate? 

Well, high-yield savings accounts come with a close to 2% APY, thus allowing you to earn rates much higher than the national average. For instance, a balance of $5,000 would make about $5 in an account with a 0.10% APY. On the other hand, that same balance would earn about $95 in an account with a 1.90% APY.

Another perk of high-yield savings accounts is that you may be able to open an account where you already bank. However, online banks are known to offer higher rates. Furthermore, most online companies that provide high yield savings accounts have high APYs and low service charges. 

In short, high-yield savings accounts offer the highest interest rates, thus allowing your balance to grow fast. If you decide to go for an online high-yield savings account options, make sure you weigh factors such as initial deposit requirement, minimum balance requirements, interest rates, and possible fees. 

Best High-Yield Savings Account Rates

Fitness Bank – 2.20% APY

Minimum initial deposit: $100

Minimum ongoing balance: $100

Monthly fee: None with a $100 ongoing balance; otherwise, $10/month

ATM card: No

Mobile check deposit: No

Checking accounts available: No

CDs available: No

CFG Bank – 2.15% APY 

Minimum initial deposit: $1,000

Minimum ongoing balance: $25,000 to earn stated APY

Monthly fee: None with a $1,000 ongoing balance; otherwise, $10/month

ATM card: No

Mobile check deposit: Yes

Checking accounts available: No

CDs available: Yes

Elements Financial Credit Union – 2.10% APY

Minimum initial deposit: $5

Minimum ongoing balance: $2,500 to earn stated APY

Monthly fee: None

ATM card: Yes

Mobile check deposit: Yes

Checking accounts available: Yes

CDs available: Yes

BrioDirect – 2.05%

Minimum initial deposit: $25

Minimum ongoing balance: $25

Monthly fee: None

ATM card: No

Mobile check deposit: No

Checking accounts available: No

CDs available: Yes

CFG Bank –  2.05%

Minimum initial deposit: $1,000

Minimum ongoing balance: $1,000 to earn stated APY

Monthly fee: None with a $1,000 ongoing balance; otherwise, $10/month

ATM card: No

Mobile check deposit: Yes

Checking accounts available: No

CDs available: Yes

MemoryBank – 2.00%

Minimum initial deposit: $0

Minimum ongoing balance: $0

Monthly fee: None with a $1,000 ongoing balance; otherwise, $15/month

ATM card: Only with a linked checking

Mobile check deposit: Yes

Checking accounts available: Yes

CDs available: No

First Foundation Bank – 2.00%

Minimum initial deposit: $1,000

Minimum ongoing balance: $1,000 to earn stated APY 

Monthly fee: None

ATM card: No

Mobile check deposit: Yes

Checking accounts available: Yes in CA, NV, or HI

CDs available: Yes in CA, NV, or HI

One American Bank – 2.00%

Minimum initial deposit: $25,000

Minimum ongoing balance: $25,000 to earn stated APY

Monthly fee: None

ATM card: No

Mobile check deposit: No

Checking accounts available: Yes

CDs available: Only available in-branch in SD