The best way to find out which high yield investments are good for your portfolio is by doing thorough research or understanding certain concepts related to risk and return.
High yield investments provide an alternative to low-risk investing options such as bonds, CDs, money markets, savings accounts and treasuries. Though, both types of investments have a place in a well-balanced portfolio.
What are High Yield Investments?
With a high-yield savings account, nearly all deposits come guaranteed as Federal Deposit Insurance Corporation (FDIC) insured bank accounts, providing up to $250,000 in coverage in the event of bank failure or insolvency.
1. High-Yield Savings Account
CDs often have higher rates than savings accounts or money market accounts because they include a time component for locking up your money before you can have it returned to you (without paying an early withdrawal penalty).
2. Certificates of Deposit
They offer a higher return than traditional checking or savings accounts, but you are limited to the number of checks you can write against them each month.
3. Money Market Accounts
If you purchase a treasury bond from them, they will pay back your principal at the bond’s maturity plus interest on top of that amount semi-annually or at maturity if a 30-, 90- or 180-day Treasury bill.
4. Treasuries