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With high inflation and a declining stock market, what are the high-yield investments that are safe right now?
Below is a list of high-yield investments right now that is ranked the safest to the least safe.
High-Yield Savings Accounts
High-yield savings accounts are one of the safest investments that you can have if you are looking for a high-yield return.
Plus, interest is credited to your account every month.
If you open a high-yield savings account with CIT Bank with $100,000, you receive $250 a month in interest income.
Below is a list of banks that currently offer higher-than-national-average yields on savings accounts.
It’s very simple and fast to open a high-yield savings account. Most importantly, your money is federally insured up to $75,000.
So, there is almost close to zero risk as you can get when it comes to high-yield investments.
|Bank High-Yield Savings Accounts||%AYP|
|Liberty Savings Bank||2.85%||Min $1 deposit, Interest credited monthly, Federally Insured, 24/7 online access|
|State Exchange Bank||2.75%||Min $1 deposit, Interest credited monthly, Federally Insured, 24/7 online access|
|CIT Bank||3%||Min $100 deposit, No monthly service fee, Mobile banking, Federally insured|
High-Yield Money Market Accounts
High-yield money market accounts are just as safe as savings accounts because it’s federally insured.
The key difference between money market accounts and savings accounts is that money market accounts might allow you to write checks and give you debit cards.
Most money market accounts only require a minimum of $1 deposit to open.
|Money Market Accounts||%AYP|
|CIT Bank||1.55%||Min $100 deposit, No monthly service fee, Access with Zelle & Bill Pay, Federally insured|
|SkyOne Federal Credit Union||2.9%||Min $1 deposit, Federally Insured, 24/7 online access|
|Lemmata Saving Bank||3.05%||Min $1 deposit, Interest credited monthly, Federally Insured, 24/7 online access|
|America First Credit Union||3.05%||Min $1 deposit, No Fees, Interest credited monthly, Federally Insured, 24/7 online access|
|Patriot Bank||3%||No fees, Federally Insured, 24/7 online access|
Series I Savings Bonds
Here’s another very safe high-yield investment option – Series I savings bonds.
What is more, it can protect you from inflation.
With an I bond, you earn both a fixed rate of interest and a rate that changes with inflation.
There are two ways to buy it:
- buy electronic I bonds in your TreasuryDirect account
- buy paper I bonds with your IRS tax refund
I savings bonds earn interest monthly, with interest compounded every 6 months.
In other words, your earned interest is automatically re-invested every 6 months.
The downside is that there is a limit on how much you can buy.
In a calendar year, one Social Security Number or one Employer Identification Number may buy up to $10,000 in electronic I bonds, and up to $5,000 in paper I bonds (with your tax refund)
Lastly, you can ONLY get all the money when you cash in the bond.
High-Yield Dividend Stocks That Are Fundamentally Strong
If you are looking for high-yield investments that are relatively safe, you can also consider high-quality defensive stocks with high-yield dividends.
Seeking Alpha provides Dividend Grades to help you with your dividend stock research and analysis.
It helps you evaluate dividend stocks by looking at the following:
- Dividend Safety
- Dividend Growth
- Dividend Consistency
- Dividend Yield
For each of the above, a “Grade” is assigned to indicate the strength (or weakness) of the dividend stock after analyzing and comparing relevant metrics among stocks in the same sector.
“Grade A+” is the best while “Grade F” is the worst.
How has Seeking Alpha Dividend Safety grade performed so far?
Based on back-tested results, if you stick to stocks with Seeking Alpha Dividend Safety Grade of A+ to A-, you would have avoided 99% of dividend cuts since 2010.
Seeking Alpha Premium is priced at only $239 per year or $19.90 per month.
What is more, for a limited time only, new subscribers can get 50% off the first year of their subscription.
So, it is just $119 per year, which is just $9.9 per month.
On top of that, there is no risk in trying out Seeking Alpha Premium for 14 days to see if it’s a good fit for you.
High-Quality High Yield REITs
REITs stands for real estate investment trusts which pool money from individual investors and use the money to buy and then operate properties such as shopping malls, hotels, office buildings, and hospitals for rental income.
REITs operate a very simple and transparent business.
They buy properties, and then rent them out and collect monthly rentals from their tenants.
It works just like how an Airbnb host rents out his apartment for rental income.
But, the difference is that REITs are doing it on a much bigger scale and they hire a team of professionals to manage the properties.
There are many different types of REITs:
- Retail REITs ( i.e. investing in shopping malls)
- Hospitality REITs ( i.e. invest in hotels, resorts, etc)
- Commercial REITs ( i.e. invest in office buildings, etc )
- Industrial REITs ( i.e. invest in warehouses and distribution centers )
- Healthcare REITs (i.e. invest in hospitals, medical centers, senior housing, nursing facilities and etc)
- Data center REITs
- Infrastructure REITs (e.g. fibre optic cables, telecommunication towers, energy pipes, wireless infrastructure, etc)
As a REIT investor, you can make money in two ways:
- Regular dividend income from REITs (i.e. passive income) mostly on a quarterly basis
- Capital appreciation.
However, NOT every REIT is a high-quality REIT. Seeking Alpha can help you evaluate REITs in terms of Valuation, Growth, Profitability, and EPS Revisions. It also gives you ratings as well as in-depth analysis to help you make your investment decision.