Low-risk investments: 7 smart ways to grow your money with less stress

"Low risk" doesn't have to mean "low reward." Thoughtfully chosen low-risk investments can offer steady, dependable returns without exposing you to the emotional and financial swings of high-risk options. You won't build wealth overnight, but the right low-risk investments can help you build long-term financial security on your terms.

Let's look at seven of the best low-risk investments so you can determine if they align with your financial goals, time horizon and risk tolerance.

A low-risk investment is one that offers minimal risk of losing your principal, provides liquidity and typically generates steady—if not predictable—returns. The trade-off is that you probably won't have quick, massive gains. But you'll likely also avoid dramatic losses.

These investments are generally designed to protect the money you put in (capital) and provide modest but consistent growth. They're ideal for those who want to earn more than a traditional savings account but aren't comfortable with the volatility of the stock market.

Keep in mind that low-risk isn't the same as risk-free. Every investment has some element of risk. Conservative investing may offer more security, but it can mean lower growth potential (market risk and investment rate risk), reduced purchasing power over time (inflation risk) and limited access to your money (liquidity risk).

A range of low-risk investment options can align with your financial goals and risk profile. But realize that while they may be in the same category of risk, they're not one-size-fits-all. Some are better for short-term goals, like building an emergency fund, while others are designed for long-term stability, like providing passive income.

Each comes with trade-offs in access, returns and safety. The goal isn't to find a perfect investment; it's to match the right option to your needs.

Money market accounts and high-yield savings accounts are two kinds of deposit accounts offered by banking institutions.

A money market account combines features of checking and savings accounts. You usually can get an interest rate that's slightly higher than a standard savings account, and you may have the ability to write checks from the account. But the institution may limit the amount of withdrawals or the number of transactions in a month.

High-yield savings accounts typically may pay much higher interest rates than traditional savings accounts, particularly at online banks. However, they don't typically offer check-writing and may have a high minimum balance requirement.

• What makes it low-risk: As deposit accounts, both are protected by FDIC insurance up to $250,000 per depositor, per ownership category, per institution.
• Best fit for: The combination of high yields, liquidity and safety is ideal for these to serve as emergency funds and short-term savings for large purchases.

A certificate of deposit (CD) is a savings product where you deposit a fixed amount of money for a specific period, typically ranging from six months to five years, in exchange for a fixed interest rate. You usually can't withdraw your money before the term ends without paying a penalty, but in return, you typically earn a higher interest rate than a regular savings account.

The longer the CD term, the higher the rate in most cases. Rates commonly range from 1.5% to 5%. Laddering CDs—a strategy where you divide your money into multiple CDs with varying maturities—can help balance liquidity and yield.

• What makes it low-risk: CDs are FDIC or NCUA-insured and offer guaranteed returns if held to maturity.
• Best fit for: CDs can be a good option for conservative investors who want guaranteed returns and don't need immediate access to their money.

Debt securities include T-bills (short-term Treasury bills), TIPS (Treasury inflation-protected securities) and I bonds (Series I savings bonds) issued by the U.S. Department of the Treasury. They are considered among the safest investments because they are directly backed by the full faith and credit of the U.S. government, meaning the government promises to pay you back with interest.

• What makes it low-risk: Because they are backed by the U.S. government, Treasuries are considered among the safest investments available. I bonds, in particular, offer inflation-adjusted returns.
• Best fit for: Investors looking for predictable returns or inflation protection or those looking to balance riskier assets. Since interest income may be tax-free at the state level, high-net-worth investors may be attracted to this feature.

Money market mutual funds, not to be confused with money market accounts, are investment products made up of short-term securities like cash, CDs, Treasury obligations and promissory notes. Returns are often a bit higher than savings accounts, but you may have to wait up to one trading day to access the funds.

• What makes it low-risk: Money market mutual funds are investments, so they are not FDIC protected, but they often maintain a stable $1 per share value.
• Best fit for: Those who want the potential for better returns than checking or savings accounts and are OK with a little less liquidity.

Short-term bond funds are mutual funds or exchange-traded funds (ETFs) that invest in government and/or high-quality corporate bonds with relatively short maturities, typically less than five years. Returns can range from 3% to 5% depending on the economy and market, though values fluctuate.

• What makes it low-risk: Short durations reduce sensitivity to interest rate changes, making them a lower-volatility option in the bond market.
• Best fit for: Investors looking for slightly higher yield than cash or savings, with moderate liquidity and low volatility.

A fixed annuity is an insurance contract you buy from an insurance company that promises to pay a guaranteed interest rate on your contributions. In the accumulation phase, the rate is typically fixed for an initial period and may change afterward. Once the payout phase begins, you receive a fixed amount regularly—either for a set number of years or the rest of your life. It can offer a predictable income stream often used for retirement planning.

Multiyear guaranteed annuities (MYGAs) are a specific kind of fixed annuity that lock in a guaranteed interest rates only for a set number of years, typically three to 10. They're more straightforward because the rate won't change during the entire term, and the contract has a clear end date.

• What makes these low-risk: Either of these annuities can provide guaranteed income and have tax-deferred growth before taking distributions.
• Best fit for: Conservative long-term savers or retirees wanting predictable income without any stock market risk.

"Blue chip" stocks refer to shares of large, well-established and financially stable companies that have a long history of reliable performance. "Dividend-paying" means these companies regularly distribute a portion of their profits to shareholders. It provides a consistent income stream in addition to any potential growth in the stock's value.

• What makes it low-risk: Stocks still carry risk, but blue chips have strong balance sheets and long dividend histories. Reinvesting the dividends boosts compounding over time.
• Best fit for: Investors who are comfortable with some market exposure but focused on steady income and long-term appreciation.

The key to choosing the right low-risk investment is aligning it with your financial goals, time horizon, liquidity needs and risk tolerance.

Are you saving for retirement in 20 years, or parking cash for a house down payment next year? How quickly might you need to access your money? Are you looking for the best place to invest money without risk, or are you more concerned about earning a steady return? The right choice depends on your answers.

For flexibility, consider an asset allocation mix: a high-yield savings account for liquidity, CDs for short-term goals and Treasury bonds or short-term bond funds for modest growth. Portfolio diversification, even among low-risk options, can balance yield, accessibility and safety.

No investment is completely risk-free. Even FDIC-insured accounts come with inflation risk, and coverage caps may apply. U.S. Treasuries carry interest rate and inflation risk. Low-risk investors may want to minimize your risk of principal loss while choosing options that fit your goals, time horizon and comfort level. Risk never can be eliminated entirely—but it can be managed wisely.

Low-risk investments won't double your money overnight, or even in a few years, but they can deliver steady growth that supports your financial goals. From high-yield savings to dividend-paying stocks, each option has its place. The right combination depends on your unique needs.

Talk to a Thrivent financial advisor to build a personalized plan that balances risk, return and peace of mind, so your money works for you, not the other way around.