9 Best Safe Investments with High Returns 2024

If you’re watching your gains from the last few years evaporate, you’re not alone – I’m in the same boat.

The future looks bleak: A looming recession (98% of surveyed CEOs see a recession coming in the next 12-18 months), rampant inflation (8.2% in September), and more rate hikes (used to slow the economy) are just a few of the daily headlines worth noting.

I don’t know about you, but I’m not immune to the storm.

That’s why I decided to compile a list of safe investments with high returns. I wanted this list for myself so I would be prepared. Now I’m going to share it with you.

Below, you’ll find my list of the safest investments for 2024 that may still earn good returns.

As a side note — Investing responsibly means you can preserve your capital to diversify with quality platforms like Masterworks:

Overview: The 9 safest high-yield investments:

1. Real Estate (YieldStreet)
2. High-Yield Savings Account (M1 Finance)
3. U.S. Government I-Bonds
4. Money Market Funds (MMFs)
5. Short-term Certificates of Deposit (CDs)
6. U.S. Government Treasury Bills
7. Corporate Bonds
8. Fixed Annuities
9. Dividend-Paying, Blue-Chip Stocks (Public)

By combining several options, you can build portfolios that balance low risk with high returns. In other words, a portfolio of safe investments with high returns.

Here are the 9 Best Safe Investments with High Returns 2024:

1. Real Estate

Real estate is considered by many to be one of the best safe investments.

Like dividend stocks, there are 2 ways to get paid: Rental income and price appreciation. Historically, both rental income and appreciation have at least kept pace with inflation, making it one of the best long-term, safe investments available.

However, buying commercial and/or residential property can be extremely costly and time consuming.

That’s where Yieldstreet comes in.

Yieldstreet is a crowdfunding platform for real estate investing. It offers an innovative alternative for buying physical real estate assets. Instead of buying and managing properties yourself, you can invest in curated, private-market offerings that have completed a rigorous due diligence process. And you can do this at a fraction of the cost of buying a property outright.

I’ve used this platform myself and can attest to its ease of use and exceptional solution. It’s given me a way to invest in some of the best fractional ownership properties.

Many opportunities on Yieldstreet are only available to accredited investors. However, the Yieldstreet Prism Fund, which was launched in 2020, is open to non-accredited investors. It’s a multi-asset class fund that seeks to generate returns through investments in commercial real estate, art, corporate debt, and more.

Since its inception, Yieldstreet clients have had an average IRR of 9.71%:

Today, Yieldstreet has paid out more than $350 million to investors. It’s one of my favorite ways of how to get a 10% return on investment.

Note: Yieldstreet also makes our list of high return investments.

2. High-Yield Savings Accounts

Savings accounts are one of (if not the) safest places to store your cash. Almost all savings accounts are FDIC-insured, meaning up to $250,000 is completely protected in case of bank failure.

With that safety, however, comes dismal interest rates. The average interest rate on savings accounts is currently 0.05% – for every $10,000 you have invested, you’ll earn a whopping $5 in annual interest.

Enter: High-yield savings accounts.

High-yield savings accounts offer interest rates 20-25x higher than traditional savings accounts while still being government-insured.  

While FDIC insurance prevents any risk of capital, inflation can erode your cash’s purchasing power.

If your high-yield savings account earns 1% interest but inflation is at 3%, $10,000 of savings this year will be worth just $9,800 next year. Imagine how much it eats away at your purchasing power if inflation is over 8%…

So while finding the highest APY savings account is great for safety (and beating traditional savings accounts by a wide margin), you’ll need to make an investment with higher risk to keep pace with and exceed inflation.

3. U.S. Government I-Bonds

A Series I Savings Bond is a debt security issued by the U.S. Government that adjusts for inflation.

I-Bonds are currently paying 4.30% interest. And since I-Bonds are backed by the U.S. Government, they are essentially risk-free. The U.S. Government is regarded as the most creditworthy lender in the world (since they can always print more money to pay back what they owe, something I wish I could do too).

You can buy a Series I bond from TreasuryDirect.gov with a minimum of $50.

Before investing, note the required holding periods (minimum 12 months).

4. Money Market Funds (MMFs)

Money market funds are pools of CDs (explained next), short-term bonds, and other low-risk securities grouped together to diversify risk. MMFs are sold by brokerage firms and mutual fund companies.

Compared to high-yield savings accounts, MMFs typically offer slightly higher returns but are not FDIC-insured. Currently, the average money market account earns roughly 0.50% APY.

You can buy a money market fund from banks, or in your existing traditional brokerage account if you use Schwab, Fidelity, TD Ameritrade, Vanguard, or another legacy broker.  

The yields, of course, are lower than what you could earn in the stock market. Investors choose MMFs for their stability, liquidity, and low-risk returns.

5. Certificates of Deposit (CDs)

In exchange for committing to not touch your funds for a short period of time, most banks will offer you a higher interest rate. These are known as certificates of deposit.

Certificates of deposit are considered one of the safest investments and are a popular place for investors to stash money they don’t need in the immediate future. You can start a CD at a physical or online bank if you want to put aside some cash and get a higher yield than a typical savings account.

Average CD rates as of the week of May 15 were:

1. • 1-year CD rate: 1.59%
   • 2-year CD rate: 1.45%
   • 3-year CD rate: 1.36%
   • 4-year CD rate: 1.30%
   • 5-year CD rate: 1.37%

Almost all CDs are FDIC-insured and offer a guaranteed return.

The holding period is the critical component of CDs, and why the interest rate is higher than savings accounts and MMFs (which allow you to withdraw your funds at any time). You can’t touch the cash in a CD within the first few months without penalty. Even after that first few months, you can get penalized if you withdraw funds from a CD early. You may lose some of the accrued interest you earned, and some banks may even take part of your principal.

Consider the interest rate risks of a long-term CD as well (similar to longer-term bonds): If rates rise when holding a longer-term CD you will miss out on earning the higher yield.  

6. U.S. Government Treasury Bills

U.S. Government Treasury Bills, or T-Bills, are short-term bonds with maturity dates of less than 1 year.

Given the U.S. Government’s creditworthiness, T-Bills are typically considered the highest return investments of any “risk-free asset.”

Although shorter maturity dates typically mean a smaller interest payment, they are the safest, lowest-risk, and most secure types of bonds to buy. Currently, the 1-year Treasury Rate is roughly 5.24% (March 25, 2023).

You can buy T-bills directly online at TreasuryDirect.gov or with your legacy broker. Treasury bills are usually sold in $1,000 denominations.

If held to maturity, you will always earn the full yield (this is true with all bonds, assuming the issuer does not go bankrupt).

7. Corporate Bonds

Corporate bonds are bonds issued by public or private companies.

Since these borrowers have a higher risk of default than the federal government, they pay a higher yield.

In other words, corporate bonds are safe investments with high returns.

You have to be more cautious, however, when researching corporate bonds.The safest bonds are rated AAA and considered reliable sources of income. The lower-rated bonds, or “junk bonds,” may provide higher yields but are higher risk, especially during recessions.

Most corporate bonds pay out semiannual interest payments and are issued with maturities ranging from 1 to 30 years. Most bonds have $1,000 face values, the minimum amount that can be purchased. The easiest place to buy corporate bonds is in your brokerage account, though you can buy directly from a company.

8. Fixed Annuities

An annuity is a contract you can make with an insurance company to exchange a lump-sum payment today for a stream of income.

Annuities are an excellent option for retirees who want guaranteed income.

Most annuities are set up to pay their holders a monthly amount over a fixed period, usually 20 years or until the death of the client. To fund the annuity, you can make a lump sum contribution or pay into it over time.

Since fixed annuities are safe investments that can provide protection and guaranteed income for life, theys are popular among individuals nearing retirement age and those who want to set aside additional funds for retirement, even if they’ve maxed out their 401(k)s or IRAs.

Interest rates vary widely based on the duration of the annuity, total amount contributed, and the structure of the contract. Most fixed annuity rates are around 3.50%-5.25%.

Yet, like anything, there are some drawbacks to consider.

First, like many other low-risk investments, the low yields of fixed annuities may be unable to keep up with inflation – annuities should not be expected to grow your wealth.  

Furthermore, annuities are complex contracts. You should read the fine print (there’s a lot of it) and work with a reputable annuity provider.

Annuities are also illiquid and hard to get out. It’s nearly impossible to withdraw money from an annuity without a hefty penalty.

9. Dividend-Paying, Blue-Chip Stocks

Compared to the above safe investment options, dividend-paying, blue-chip stocks offer the highest potential for long-term returns. It’s not even close.

While they may not be safe investments with high returns in 2024, to only think about 2024 is short-sighted.

Blue chip stocks are massive, financially-sound companies that have well-established earnings, various products, and proven long-term resilience during downturns and recessions. Their businesses typically grow steadily and have wide business moats, making them exceptionally safe investments with high returns.

Given these companies’ abilities to generate huge amounts of free cash flow, most blue-chip stocks pay dividends.

A dividend is a cash distribution a public company provides to its shareholders.

While growth stock investors only benefit from price appreciation, dividend investors benefit from appreciation and a steady stream of cash dividends. Many dividend investors have portfolios that average a 2-4% dividend yield.

Here’s a list of popular blue-chip dividend-paying stocks:

1. • Apple Inc. (NASDAQ: AAPL)
   • Microsoft Corp. (NASDAQ: MSFT)
   • McDonald’s Corp. (NYSE: MCD)
   • Costco Wholesale Corp. (NASDAQ: COST)
   • Coca-Cola Co. (NYSE: KO)
   • Verizon Communications Inc. (NYSE: VZ)
   • Caterpillar Inc. (NYSE: CAT)        
   • Chevron Corp. (NYSE: CVX)
   • Johnson & Johnson (NYSE: JNJ)        
   • Lowe’s Cos. Inc. (NYSE: LOW)
   • PepsiCo Inc. (NYSE: PEP)
   • Procter & Gamble Co. (NYSE: PG)        
   • Target Corp. (NYSE: TGT)        
   • Walmart Inc. (NYSE: WMT)

BONUS: Gold IRAs

Gold is an asset many investors know should be in their portfolio, but one that isn’t often included.

Ray Dalio, founder of Bridgewater Associates (the world’s largest hedge fund), is a huge proponent of gold’s risk-reducing and return-enhancing characteristics. For this reason, it makes up 7.5% of his famous All Weather Portfolio – a portfolio designed to perform well in every economic environment.

Since gold is a finite physical commodity, it is a natural hedge against inflation. It also has a long history of being a store of wealth, meaning it can be held and converted into money at a similar rate to its purchase price.

Investors who buy gold do so for a long-term inflation hedge and a place to safely park money. Given the long-term nature of the investment, most investors choose to purchase gold via an IRA. The top gold IRA providers are:

Take the time to open an IRA and buy some gold. It’s an asset that has given investors stable, inflation-hedged returns for a long time.

Risk and Reward

Every investment you make has its own risk/reward profile.

Generally speaking, the higher the risk, the higher the potential reward (like growth stocks). The lower the risk, the lower the potential reward (like U.S. Treasuries).

Each of the 9 investments on my list has varying amounts of risk and reward, and has different priorities. Some investments are for capital preservation. Others are riskier, but offer higher potential for returns.

Final Word: Safe Investments with High Returns 2024

That is my list of the 9 Best Safe Investments with High Returns in 2024.

At a bare minimum, I would strongly suggest you check out a high-yield savings account from an online-only bank like CIT.

From there, you might consider branching out into alternative investment strategies like real estate through platforms like YieldStreet or Fundrise.

Remember, to diversify across various assets and build a portfolio that mixes higher risk/higher reward investments with safer alternatives.

We’re all experiencing the pain caused by the stock market and inflation, but we do have options to protect our capital.

Get started today.

Read more: How to Invest 50k

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