5 Best Low Risk Investing Options and Their Benefits


We all want to prepare for our eventual retirement and have a little fun along the way, so it is important to not only save money but you also need enough to fund your lifestyle. This can take discipline, and you must balance your risk vs reward in all your financial endeavours.

Are you looking for a way for your money to make money without taking too much of a risk? It is a complicated world of investing, and you need to make strategic moves without taking chances, especially as you get closer to retirement.

Fortunately, you have lots of options. Here are five of the best low-risk investment options out there.

Option #1: Promotional Bank Bonuses

This is a great way to earn free money without taking any risks. Most banks will run promotions at different times of the year to attract new business, and if you have a few thousand you don’t need to get at, you could be rewarded with free cash.

These promotions usually require you to open a checking account and deposit some cash. Then, depending on the lending institution, they require a few more things, including:

  • Reoccurring pre-authorized debt payment
  • Online bill payment
  • Reoccurring direct deposit
  • Opt in for overdraft protection

These are a few hoops to jump, but once you meet the requirements, you will get your cash bonus to spend or put into another investment. Some of these accounts come with certain transaction fees, service charges, or monthly fees, so try to waive these or make sure they are low enough so you gain more than you pay.

Look into all the banks and online banks to take advantage of this free money.

Option #2: Investing in Mortgages

Another way to invest with low risk is to get involved with a mortgage investment. This passive way to grow your nest egg doesn’t require much money. You are not buying property yourself but rather lending money to those that are.

It can be on your own with a legal agreement to lend funds in exchange for a fixed interest rate over the loan term. This may be too daunting for you, but there are other mortgage investment opportunities like:

Private Mortgage Fund

A private mortgage fund locks your money in for the loan duration but pays a higher interest rate.

Public Mortgage

Fund With a public fund trades on an exchange so you can buy and sell when you want to.

Mortgage Syndication

This involves several people funding a mortgage together, and you gain fractional interest in the mortgage.

The mortgage is secured by the property being purchased, and if there is a default, you can get possession of that property to sell to get your money back. Usually, though, you will get high-interest payments over the term and recoup your money at the end.

Option #3: High-Interest Savings Account

Most banks offer their clients high-interest savings accounts, which are much better than your standard savings account. While there is very little risk, some lenders will offer a variable rate, so it will fluctuate over time.

You also will have a minimum deposit balance requirement that needs to be maintained, so you won’t have access to this money while you take advantage of the higher interest rate. They may also have fees, so shop around for the best high-interest account you can find. Traditional banks are good, but some great online banks give better rates to gain your business.

Option #4: GICs

Guaranteed Investment Certificates are investments that require you to lock in a certain amount of money for a short period. In exchange, they provide a higher return rate than a bank account. These term deposits usually have no fees and will have a minimum of $500 to invest. Terms range from 30 days to 10 years and include:

  • Non-Redeemable – Highest interest rate but locked in for the full term
  • Redeemable – You can withdraw some or all during the term
  • Market Linked – These follow the performance of the market with a flexible rate

You will get a low-risk, safe investment protected by the CDIC and get used to locking money in for other investments.

Option #5: Dividend Paying Stocks

Buying stocks can be risky, depending on the type of trader you are, but it is best to have a long-term mindset for the lowest risk. This is called positional trading, and it Is a buy-and-hold strategy. With all stock trading, you should research the company and make sure it isn’t volatile.

Besides the gains you get from buying stocks, pick stocks that provide dividends to make more money without added risk. These companies pay out a percentage of their profits to shareholders through cash dividends. This is passive income; you can spend or reinvest it for maximum gain.

These are the best low-risk investment options that can make you money. Seek them out and get your money working for you without worrying about a risky investment.


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