Four Low Risk Investment Ideas

Right now, with the stock market on the volatile side, many people are asking me about low risk investment ideas. Mutual funds, ETFs and stocks seem very risky to many right now. The first thing to remember is that there is no such thing as a risk free investment. All investment carries the risk of loss. But there are some investments that carry a lower risk than others. Here are my four favorite low risk investment ideas:

1. Online savings account. I love this one. The money remains liquid and accessible. It's a cash investment, and you get a higher return than with a traditional savings account. You can get between 4.50% and 5.50% return on an online savings account. Just make sure that it is insured by the FDIC, and that you are dealing with a reputable institution. Minimums may apply.
2. CDs. These are classics. However, you can't access the money in a CD before maturity without incurring high penalties. But the rates, if you have at least $5,000 and plan on putting the money in for at least 5 years can be right around 7% yield. That's not shabby at all. The shorter term CDs and the lower dollar amounts will have lower rates, probably right around 3.50% to 6.50%, depending on the amount and the term.
3. Government bonds. This includes municipal bonds. These are giving pretty decent rates in the short term, between 4.21% and 5.00% on the short-term government bonds. Long-term U.S. Treasuries (those with at least a 10-year maturity) are heating up. But, again, these will tie up your money so that it is not accessible.
4. Money market mutual funds. These are mutual funds, but they are invested in cash assets and grow at the money market rate. I like these because you can withdraw from them fairly easily, and the grow at right around 5% a year. These are considered a low risk investment because they operate on the money market, rather than with stocks as mutual funds do.