Is there anything out there better than a 6% CD? Do mutual funds/indexes give better returns? Risk free?
What other kind of low-risk investments are out there?
- dougzinbostonLv 41 decade agoFavorite Answer
You want to make more then 6% "risk free"?? You need to understand that the lower the risk, the lower the return (in your case, the return is the interest rate). There is SOME volume of risk on the CD which is why they are offering you the 6%...but since the risk of the bank defaulting on the CD is low, they give you a low interest rate.
If you want to buy a "no risk" investment, you'll only be buying a federal savings bond. You can cash them in after 30 days and they will always carry a cash value. They are considered "risk free" since the U.S. government would have to collapse and dissolve for a savings bond to default and lose total value.
The "risk free" aspect of a federal savings bond is the exact reason that it takes 14 years or longer (depending on the fed interest rates) for the savings bond to mature.Source(s): BSBA Finance, studying for Certified Finanical Planner's license
- swenjjLv 41 decade ago
mutual funds should get better returns in the long run, but they are not risk free, if for some reason you need super low risk then stick with cds and online savings accounts, if you feel like investing then pick a conservative mutual fund, one that invests in blue chip stocks or bonds, an income fund or asset preservation fund
it wont give you as high a potential return as a growth fund or other types,but should be saferSource(s): my brain
- 1 decade ago
CD's don't pay any better than what you've found at 6%. The problem with CDs are your money is locked in for the term. Many money market accounts pay about the same rate, may very slightly less, but allow you access to your money as needed.
Mutual funds are much better if your saving for at least 5 years. You need to research and settle on 3-5 funds with good long term track records.
Check out bankrate.com for CD and money market rates and Morningstar.com for mutual funds.
- pcreamer2000Lv 51 decade ago
Best is to diversify...
However other than cd or annuity nohting is risk free.
and even cd/annuities if with a outfit that isnt healthy...(especially if with a non-fdic outfit)