When it comes to "safe" investments, perspectives vary depending on the economy and individual goals. However, cash and U.S. government bonds, like Treasury securities, are generally seen as low-risk options because they offer minimal chances of loss. But even these come with the risk that inflation could outpace your returns, lowering your purchasing power over time. Fortunately, there are several low-risk ways to grow your money, from high-yield savings accounts to CDs and government-backed bonds. Here are five ways to start investing in the U.S. with low risk.

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1. High-Yield Savings Accounts

A high-yield savings account is like a regular savings account, but with a better return on your money. These accounts offer much higher interest rates—sometimes as high as 5.30% per year—while keeping your cash safe and accessible. They are FDIC-insured, meaning your deposits (up to $250,000) are protected.

Risk level: almost zero since your money is sitting safely in the bank, growing steadily​. The only real risk here is that interest rates fluctuate, and if inflation is higher than your interest rate, your money may lose value over time.

High-yield savings accounts also pair well with your safety net. For guidance, read How to Build an Emergency Fund on Any Budget.

2. Money Market Funds

Money market funds invest in low-risk securities like U.S. Treasurys and certificates of deposit (CDs). These funds are great for conservative investors looking for stability while still earning more than a typical savings account. While money market funds aren't FDIC-insured, they are generally considered very safe because they focus on short-term, high-quality investments.

Risk level: Low. While rare, there is a slight risk that the fund’s value could fall below $1 per share during severe financial market disruptions.

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3. Treasurys

U.S. Treasury securities are bonds issued by the federal government, making them some of the safest investments you can make. They come in several varieties—T-bills, T-notes, and T-bonds—depending on the term of the investment. The government essentially borrows your money, pays you interest, and returns the principal at the end of the term. Since these are backed by the U.S. government, the risk is virtually non-existent. However, the return might not be very high compared to other investments.

Risk level: Extremely low. Inflation might outpace the fixed interest, reducing the real value of your returns over time. In rare cases, geopolitical or economic shifts could impact government bond stability, but this is highly unlikely.

Government-backed investments are often part of long-term planning. For next steps, see Retirement Planning in Your 30s: How to Start Planning for Retirement.

4. Certificates of Deposit (CDs)

CDs are a great way to lock in a specific interest rate for a set amount of time, usually ranging from a few months to several years. The longer the term, the higher the interest rate. However, your money is locked in for the term you choose, and withdrawing early can result in penalties. CDs are also FDIC-insured, making them a safe bet.

Risk: Very low, but you need to be okay with not touching your money for a while.

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5. Agency Bonds

Agency bonds are issued by government-affiliated agencies like Fannie Mae or Freddie Mac. While they are not directly backed by the U.S. government like Treasurys, they are considered relatively safe because of their association with federal institutions. These bonds often offer slightly higher returns than Treasurys, but they still maintain a low risk profile. They're a good option if you're looking for a balance between safety and yield.

Risk: Low to moderate, depending on the specific agency bond.

As you explore different investment types, make sure they align with your personal priorities using How to Set Financial Goals and Actually Achieve Them.

Final Thoughts

If you're new to investing and want to keep your risk low, these five options are a great place to start. They offer a balance between safety and yield, so you can build your financial security without taking on too much risk. Remember, diversifying your investments across these different low-risk options can provide an extra layer of protection while helping you reach your financial goals!

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