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What Are The Safest Investments In 2022?

Written by Paul Esajian

Key Takeaways:

What are the safest investments? |Real Estate |Certificate Of Deposit |U.S. Savings Bonds |Municipal Bonds |Money Market Funds |Safe investments in 2022


Successful investing involves a careful balance of risk and reward. In an ideal world, every investment opportunity would offer high rewards with little to no risk. In reality, however, no investment doesn’t walk a fine line between risk and reward. The relationship between risk and reward leads many individuals to search for the safest investments when getting started, and rightfully so.

For those hoping to save for retirement, provide for their families, plan for the future, and more, minimizing overall risk can be crucial. Luckily, several low-risk options can be profitable over time. Keep reading to learn how the safest investments in 2022 can help you reach your financial goals for retirement.

5 Safest Investment Options

For those looking for low-risk investment opportunities, there are a number of options. Each will offer varying profits; however, they are all great avenues for aspiring entrepreneurs looking to make their first investment. Below are five of the safest investments you can make for your future:

  1. Real Estate

  2. Certificate Of Deposit

  3. U.S. Savings Bonds

  4. Municipal Bonds

  5. Money Market Funds

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safest investments for retirement

1. Real Estate

While each real estate investing strategy can be profitable, individuals looking for the safest investments may find certain options more attractive. Low-risk real estate investing can include house hacking, buying a vacation home, or wholesaling. Each of these strategies provides investors with a strong degree of control over their investment while still offering attractive profit margins.

For example, house hacking is a real estate strategy where individuals rent out a portion of the property they are living in. Anyone with a spare room or extra unit attached to their house may generate income by renting it out on Airbnb or another website. This low-risk strategy does not involve loan payments or interest rates, making it very attractive for those with the extra space.

Homeowners who are interested in buying a vacation home will be happy to know that, with the right planning, this can be considered a low-risk investment strategy. Individuals interested in owning a second home can identify the right location and rent out the property when not in use. Renting the property will help the mortgage pay for itself and may result in added monthly income.

Another one of the safest investment strategies is wholesaling. This involves finding and marketing properties for sale and then assigning the contract to an investor or performing a double close. Wholesaling doesn’t come with many risks because investors are not required to own or manage a property, conduct repairs, or even make mortgage payments. While wholesaling can require an understanding of the market area, it can be highly profitable. To learn more about other common real estate exit strategies, be sure to read this article.

2. Certificate Of Deposit

A Certificate of Deposit (CD) is one of the most popular low-risk investments because they require little specialized knowledge. CDs require investors to deposit money for a specific amount of time and, in return, are paid interest for the entire time. They are backed by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000, which helps guarantee investors can avoid loss. Investors need to create an account with an insured financial institution to purchase CDs and fund the investment. Investors can use the FDIC website to find an insured bank near them.

Steve Scott, CTO at Spreadsheet Planet says that “as an expert, I’d assert that money market accounts work like CDs or savings accounts. They frequently pay higher interest than savings accounts, but also allow you to write checks or use a debit card, giving you more flexibility than savings accounts”.

There is a trade-off for the ease of investing: CDs can offer relatively low returns. At the moment, interest rates are relatively low, thus limiting the return potential of the investment. Investors looking to increase their returns can look for financial institutions with more competitive rates. Despite the low returns, CDs represent an excellent opportunity for those asking, “what are the safest investments for retirement.”

3. U.S. Savings Bonds

U.S. Savings Bonds are notes issued by the federal government that generate income through fixed interest rates. They are thought of as one of the safest investments for retirement because they are backed by the government and can take several years to mature. The time to maturity depends on the bond, but investors can expect anywhere from five to 30 years. They can be purchased through the Treasury Department’s website or by requesting paper bonds when filing income taxes.

Investors interested in U.S. Savings Bonds should be aware of inflation rates, as these can negatively impact the interest earned from the investment. The inflation return rate is typically adjusted every six months and—if it is negative—could bring investors’ total returns down. Despite the potential impact of interest rates, those who opt for U.S. Savings Bonds can enjoy an overall low-risk investment.

4. Municipal Bonds

State and local governments use municipal bonds. They generate revenue from interest, which is often free from federal income taxes. Similar to U.S. Savings bonds, municipal bonds are among the safest investments because a government backs them. They can be purchased through mutual funds or exchange-traded funds. In some cases, investors can also purchase them directly from their state or local government.

It is worth noting that municipal bonds can be callable, which means the government issuing the bond could return it before the maturity date. While investors would likely not lose their initial investment, they would fail to receive further interest payments. This situation, while uncommon, would undermine the profitability of the bond. While this is a risk associated with municipal bonds, they remain one of the safest investments. To learn how bonds compare to other investments, be sure to read this article.

5. Money Market Funds

For anyone wondering “what are the safest investments,” money market funds can be a great answer. Money market funds are mutual funds that invest in cash securities with high credit ratings. They can generate interest, which is paid to investors through dividends. Money market funds are typically thought of as a safe place for investors to “park” their money. This is because money market funds aim to maintain a $1 net asset value (NAV).

Due to their NAV requirements, money market funds typically protect investors from losing their principal investment. Despite not being backed by a government, like bonds, money market funds have historically represented one of the safest investments. Investors should, however, be aware that the interest earned from money market funds can be nominal.

safest investments 2022

How To Choose The Safest Investments In 2022

To pursue the safest investments in the year ahead, investors will have to pay careful attention to the market’s reaction to Coronavirus. If for nothing else, COVID-19 has drastically altered the way we look at growing and maintaining capital in a post-pandemic world. Greg McBride at Bankrate suggests that today’s uncertainty should lead more investors to preserve their capital rather than grow it at a high rate. It has never been more important for most investors to have a safety net to fall back on.

According to McBride, “The pandemic drove home the importance of having an emergency fund so more households have socked away money from stimulus payments or reduced spending in safe havens like savings accounts and money markets. For this money, the focus is appropriately on preserving capital rather than generating high returns.” In uncertain times it is crucial important to balance personal finances with future investments.

Those capable of doing more than preserving their capital will want to adjust their 2022 investment strategy to reflect the market’s support. Interest rates are slowly increasing after years of historically low rates. However, real estate investors may still be able to take advantage of somewhat low borrowing costs.

The demand for rental units and houses across the country is expected to continue to grow throughout the year ahead. Last year saw a major increase in demand, causing prices to raise dramatically. Despite expected interest rate hikes in the months ahead, demand for real estate is not expected to go down. Real estate investors ready to break into competitive markets may find buy-and-hold strategies to be highly profitable. Investors working with short-term vacation rentals may also find that these properties continue to rebound in 2022. As restrictions continue to lift, and the country returns to normal travel is expected to rise. Each of these factors suggest real estate may be one of the safest investments in 2022.

In addition to rental properties, the stock market appears ready and willing to help investors in 2022. Despite recent geopolitical events, plenty of stocks are still performing well. In the months ahead, be sure to consider how today’s undervalued stocks could make strong investments in the year ahead.

While there are several key indicators to watch for in the year ahead, no one can say which investments will be the most profitable. Before deciding, the best advice will be to research each potential opportunity, even those considered the safest. Pay close attention to market changes brought on by political and economic changes around the world — and continue to watch how the economy adapts to the ongoing effects of COVID-19. While certain industries appear to have recovered almost entirely, there are numerous considerations to make before investing in the year ahead. And, for more information on the the long-term impacts of coronavirus on real estate, be sure to read our guide.

The Effects Of Inflation

Inflation is an important consideration for many investors opting for safer choices. Many low-risk investments are associated with lower yields, especially when compared to investments like corporate stocks or index funds. When thinking about a “safe” portfolio, it is important to ensure that the growth rate is above the rate of inflation. If not, you risk losing purchasing power in the long term.

Amid the various long-term effects of the COVID-19 pandemic, investors should expect inflation to increase in the next year. The annual rate was roughly 7.5 percent in January, which is the highest rate since February of 1982. In the coming months investors should prepare for gas and oil prices to increase, as well as other basic goods like food and housing. Recent news shows the Federal Reserve raising interest rates to begin to combat this increase, but time will show how effective these early measures are.


Safe investments can help individuals find a balance between risk and reward when planning for their financial futures. For those in the process of saving for retirement, low-risk opportunities will be the most attractive. Luckily, options ranging from U.S. Savings Bonds to real estate look promising for the year ahead. By choosing the safest investments, individuals can help improve their finances. Remember, no matter where you are in life, it is never too early (or too late) to start planning for your future.

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The information presented is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing provided shall constitute financial, tax, legal, or accounting advice or individually tailored investment advice. This information is for educational purposes only.