9 Best High-Yield Investments for 2023

High-yield investments can help you make more money than you would with a traditional savings account. They also help you take advantage of passive income streams. 

Financial experts recommend balancing your investments across channels with low risk and higher risk (and higher returns) products. Low risk avenues like traditional savings accounts might feel safer, but your return may not be enough when you need the money the most.

If you are a beginner or only have a little money to get started, you might need help figuring out which products meet your needs. To make it easier, we’ve collected a list of the top 9 high-yield investment options along with their key features, level of risk, and where you can buy them. Take a look!

Best Low Risk, High-Yield Investments

1. High-Yield Savings Accounts

Many online banks offer high-yield savings accounts with an annual percentage yield (APY) over 4%, whereas traditional savings accounts usually earn less than 1%. At one time banks had challenging requirements like high opening deposits and minimum balances.  Today, you can open most of these accounts with $100 or less and no monthly maintenance fees or balance minimums.

Key Features

• Liquidity. Most high-yield savings accounts make it easy to withdraw or transfer your money at any time, often providing an ATM card. 
• Some banks set a maximum number of withdrawals before charging a fee, so read the fine print, especially if you need to move your money in and out often. 

Risk Level: Low

• High-yield savings accounts are typically FDIC insured making them a safe investment if your goal is keeping your funds accessible and not having to worry about losing money.
• On the flip side, these high-yield investments generally won’t pay as much as accounts invested in the stock market. Over the long term, your savings may not be enough to offset inflation.

How to get started

Online banks and financial institutions make it easy to apply through their websites and mobile apps.

2. Short-Term Certificates of Deposit

Certificates of Deposit (CDs) are bank products that pay higher interest rates than savings accounts by setting aside a fixed amount of money for a fixed amount of time. They range from short-term like six months to long-term like five or even ten years. 

Key Features 

• They require little management on your part once the account is opened, so that’s good for beginners.
• Fixed-rate CDs lock in your interest rate for the length of the term, which insulates your investment when market rates drop. Shorter terms let you reinvest money as the CD matures and take advantage of rising interest rates. 

Risk Level: Low

• They are FDIC insured up to $250,000.
• They may appeal to you if you’re not ready for the stock market’s volatility, because your money will grow as long as you leave it alone for the full term.
• CDs “tie up” your money for a certain period of time, which can be a drawback if you want your cash highly liquid. 
• To get the safety and low risk of CDs, you may be sacrificing higher interest typical of accounts tied to the stock market. 

How to get started

You can easily open an account through an online or local bank or credit union through this website or app. Be sure to compare rates and terms from different financial institutions. 

3. I-Bonds

The letter “I” in I-Bonds stands for inflation and you buy these high-yield investments from the U.S. Treasury. As a bondowner, you lend the U.S. government money and get paid back your principal with interest. The interest rate on I-bonds varies based on inflation. 

Key Features

• I-Bonds reduce the impact of inflation on your investment by paying a variable inflation rate on top of a base rate. 
• If inflation goes up, your bond earns more money. If inflation goes down, so does the interest rate you get. 
• Bonds earn interest for 30 years assuming you do not cash them out.

Risk Level: Low

• Not only are government bonds considered safe investments because the Federal government backs them, most advisors will tell you it’s smart to have them in your portfolio to balance higher-risk investments like stocks.
• When you compare the returns of riskier investments like stocks, real estate, and corporate bonds, you most likely won’t earn as much with I-bonds.

Where do I get one?

I-bonds are sold only through the U.S. Treasury at treasurydirect.gov. 

4. Treasury Bills (T Bills)

Just like with I-bonds, with Treasury Bills (T Bills)  you lend the government money in the form of a bond and get paid back with interest when the bond matures.      

Key Features

• Short maturity terms, even as little as 4 weeks, keep your money relatively liquid.
• Like other bonds, T bills help balance your investments if you also have higher-risk accounts in your portfolio.
• T Bills can be purchased for as little as $100.

Risk Level: Low

• Government bonds don’t have a risk of default.
• Guaranteed interest rates make your return predictable.

Where do I get one?

Create an account through a brokerage firm, or buy T-bills directly through the Treasury at treasurydirect.gov. 

5. Money Market Funds

A money market fund is a type of mutual fund. Think of a mutual fund like a pool of money from a bunch of individual investors. The investments that make up the fund have short terms and high liquidity. That means your investment has high liquidity (easy access), too. 

Key Features

• These mutual funds work well for investors who prefer lower risk and shorter term investments to keep cash flow handy.
• They work best for short term investing needs.

Risk Level: Low

• Money Market Funds buy investments that are subject to strict regulation, making them a relatively safe option. 
• As with most low-risk investments, your return won’t be as high as the return on  investments with higher risk, but they generally offer better rates than a traditional bank account

Where do I get one?

You’ll need an account with a brokerage firm to buy these funds. You can easily set one up on a brokerage firm’s website or on your phone through their mobile app.

Best Medium to High-Risk, High-Yield Investments

6. Corporate Bonds

Now, let’s move into some high-yield investments that carry higher risk but also the potential for higher returns.

You can help a company raise money by buying their corporate bonds. You’re essentially giving them a loan which they pay back with interest, like T-Bills and I-Bonds. 

Key Features

• After you purchase the bond, the corporation makes recurring interest payments to you until the bond matures. 
• Once the bond matures, you receive back your original investment (your principal). 
• They have fixed interest rates, which protects you if interest rates fall, but may be a drawback if you miss out on increasing interest rates.
• They generally pay higher returns than government bonds.
• Although they can be issued in terms up to 30 years, that’s not typical. Usually, you’ll find these in shorter term options like 12 to 36 months. The shorter the term, the sooner you get your money back, so they are more liquid than long-term investments, but not as liquid as a high-yield savings account. 

Risk Level: Medium

• Your return depends on the financial stability of the corporations you invest in, and their creditworthiness can change over time.
• Corporate bonds are not FDIC insured.

Where do I get one?

You can set up an account with a broker to buy corporate bonds. If you’re not sure how to find one, our review of the five best trading platforms can help.

7. ETFs

ETF stands for exchange-traded fund. As with other products called “funds,” ETFs combine money from multiple investors to buy compilations of securities. 

Key Features

• ETFs often invest in stocks within the same particular industry, like technology.
• They keep your portfolio diverse by spreading the fund across products of varying risk, and typically have low fees.
• They work better for investors with a longer-term strategy and tolerance for leaving their money in the market. 

Risk Level: Medium to High

• While they carry the risk of the stock market, they may be less risky than buying individual stocks because of the inherent diversity of the funds.
• Brokers typically allow you to choose from ETFs with lower or higher risks based on your risk tolerance.

Where do I get one?

Consult a brokerage firm to get started.

8. REITs

REITs are real estate investment trusts that own, operate, and finance commercial real estate. Specifically, REITs focus on income-generating real estate.

Key Features

• Because a REIT fund can be invested in several different sub-sectors of real estate like apartment complexes, office buildings, hospitals, hotels, and so on, they provide diversity for your portfolio.
• They allow you to get into real estate investing even if you don’t have experience or loads of up-front cash like flippers and landlords have to have. They also eliminate the need for you to do property management.
• They’re designed for longer-term investing for those who do not need high liquidity.

Risk Level: High

• With the possibility of returns as high as 12%, you take on more risk. Real estate market prices can fluctuate in big swings. 
• The advantage of a REIT is the diversity of the investments, which helps reduce some the risk of those fluctuations.

Where do I get one?

Brokers offer REITs through their apps and websites. Some brokers like Fundrise specialize in non-publicly traded REITs.

9. Fractional Shares

Buying fractional shares means you buy only the portion of stock you can afford, rather than a whole share. It’s sort of like buying candy from the bulk bins, without the calories!

Key Features

• Stocks ranked on the S&P 500 like Apple, Microsoft, Amazon, Johnson & Johnson, and Tesla become accessible to investors without a lot of spare cash, instead of waiting until you have hundreds of dollars set aside for a single full share. 
• Over time you can build up to full shares while keeping your portfolio diverse by choosing slices from different companies.
• Beginner investors often find buying fractional shares less intimidating.

Risk Level: High

• Because you're investing smaller amounts of money across multiple companies, your risk may be less than when you buy individual stocks.
• It’s still the stock market, so there’s no guaranteed profit. 
• Stock market investing usually benefits those who can tolerate a long-term approach, rather than those who need ready-to-access liquid cash.

Where do I get one?

Many brokerage platforms offer fractional shares like Charles Schwab Stock Slices, M1 Finance, and Fidelity.

Final Word

There’s no one right path into high-yield investments, which means you have plenty of options to consider. The safer, lower risk options may not compete with the higher returns of securities investing, but they still trump a plain ole savings account while keeping your cash liquid. 

Remember, sticking with super safe accounts with dreadfully low returns might be just as risky as trying out some of these high-yield options if your money doesn’t grow as fast as inflation does. As long as you’ve got as little as $10 a month you can earmark for investing, you can start dipping your toe in the high-yield investment waters.