What Are Some Safe High-Yield Investments?

What Are Some Safe High-Yield Investments?

Examples of safe high-yield investments include preferred stock, utility stock and fixed annuities, as Money Crashers reports. Brokered certificates of deposit and unit investment trusts are other examples of investments that have low to moderate risk as well as high return yields. Investors can also choose to purchase stock and bonds through index funds, according to Forbes.

Preferred stock act like bonds, but they trade like stocks, explains Money Crashers. Their liquidity risk is low, and they often pay every month or quarterly. The dividend rate is about 2 percent more than what an investor usually receives from treasuries or certificates of deposit.

Utility stocks have a relatively stable price, making them a safe investment, according to Money Crashers. Furthermore, they do not rise or fall due to economic contraction or expansion because people always need utilities regardless of the state of the economy. Investors receive a dividends pay that is about 3 to 4 percent higher than that of treasuries.

Conservative investors who do not want to lose their principal can invest in fixed annuities or brokered certificates of deposits, but these options do not pay as well as preferred stock and utility stock, as detailed by Money Crashers. Fixed annuities provide investors with the option of saving for retirement and allowing their cash to grow tax-deferred, but they incur a penalty of 10 percent if they withdraw before they reach the age of 59 1/2.

Income mutual funds combine various securities, lowering the reinvestment and market risk as well as increasing the payout, according to Money Crashers. Buying index funds instead of single funds can promise low risk and higher yields, as Forbes reports.