10 Safest Investments

Are you looking for the ten safest investments? After the volatility of the financial markets the past few years, you aren’t alone. Don’t listen to people who tell you to invest in a mattress or mason jars to find safety. These ten investments will protect your savings in many varied situations.

  1. FDIC Insured money market account. A safe place to begin saving money is in a money market account at a bank. Beware of money markets offered through brokers, because they may not be insured, and although considered generally low risk, have a larger chance of losing money than an account at a bank.
  2. Savings Bonds. These are backed by the full faith and credit of the U.S. government, are purchased at a discount, and never have penalties for early redemption. Inflation-protected bonds raise interest rates when inflation increases, but pay lower returns when inflation risk is low.
  3. Treasury Bills, notes, bonds, and TIPs (treasury inflation protected securities). Like CDs, these generally pay higher interest rates than money market accounts or savings bonds. You may pay commissions to purchase treasury investments through a broker, and they’re best held till maturity to guarantee no principal fluctuation.
  4. Government bonds of “blue chip” countries. Higher rates can be achieved by loaning money to countries with high credit ratings, such as Germany, Japan, or the U.K. However, exchange rates can wreak havoc on returns. Assuming currencies remain level, the chance of these countries defaulting on debt is considered minimal.
  5. Certificate of Deposit. Bank certificates are historically safe investments, and in case of bank collapse, FDIC insurance guarantees deposits up to certain thresholds (ask about current maximums before investing). "They’re not as liquid as money markets,” writes financial guru Jean Chatzky, “but the returns can be higher." CDs are offered in a range of maturity timeframes. 
  6. Municipal Bonds. Loaning money to cities may be safe, as long as the city has a diversified employment base, good credit rating, and the threat of property tax decreases is low (property taxes are most cities’ top revenue generator). Additionally, municipal bonds may be federally and state tax free.
  7. AAA Rated Corporate Bonds. Loaning money to companies can be a safe investment if held to maturity. Make sure a corporation has a AAA credit rating if worried about safety. This is the highest credit rating available.
  8. Gold. Although five times more volatile than stocks on a minute-by-minute basis, gold has maintained value over long periods of time because of its “precious” nature. The World Gold Council calls it “the investment of last resort” for investors who have soured on everything else. Gold historically performs well during inflationary periods and in uncertain times.
  9. Real estate. Much like gold, real estate is a precious resource. This makes real estate a historically safe long-term investment, but a horrible short-term play. Real estate prices vary in the short-term based on strength of the community and buildings around your plot. Diversification helps negate this risk.
  10. The stock market. Bet you didn’t expect to see stocks on this list. Yet, scholars maintain that the strength of the economy is based on a corporation’s ability to earn money. Therefore, if the economy survives, stocks will be a central part of the plan. The Securities and Exchange Commission says that “historically, stocks have performed better over the long term than other types of investments.” Much like real estate, diversification helps “smooth the bumps” of investing, and long-term investment is considered “safe” while short term investment periods are incredibly volatile.


Chatzky, Jean Sherman, and Arielle McGowen. Money 911: Your Most Pressing Money Questions Answered, Your Money Emergencies Solved. New York, NY: Harper, 2010. Print.

FDIC: Federal Deposit Insurance Corporation. Web. 10 May 2010. http://www.fdic.gov/.

"Individual – Treasury Securities & Programs." TreasuryDirect. 7 Dec. 2009. Web. 10 May 2010. http://www.treasurydirect.gov/indiv/products/products.htm.

"Invest Wisely: Mutual Funds." U.S. Securities and Exchange Commission (Home Page). 2 July 2008. Web. 10 May 2010. http://www.sec.gov/investor/pubs/inwsmf.htm.

Investing in Gold World Gold Council, Gold Investment Value as a Global Currency and Commodity.Web. 10 May 2010. http://www.invest.gold.org/.

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