6 Best Low-Risk Ways To Earn More Interest on Your Money

Low-risk ways to earn interest are savings and deposit products that protect your principal while paying you a set or variable annual percentage yield (APY), usually backed by federal insurance up to $250,000 per depositor, per bank/credit union.

Short answer: For most people, a high-yield savings account (HYSA) at an FDIC-insured online bank is the best default option. It pays 10 to 12 times the national average savings rate, keeps your money liquid and protects your deposit up to $250,000.

Each option comes with its own inconveniences, but narrowing down the perfect choice for your situation is fairly straightforward. Let’s look at six low-risk ways to earn more interest on your money.

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Key Takeaways

• Low-risk ways to earn interest protect your principal while paying steady, modest returns: Think FDIC- or NCUA-insured accounts, U.S. Treasuries and money market products rather than stocks.

• Match the option to when you'll need the money: A high-yield savings account or money market account keeps cash liquid, while CDs and Treasuries reward locking it up longer.

• A high-yield savings account is the best default for everyday cash: Top accounts recently paid around 4% APY versus a 0.38% national savings average — roughly 10 to 12 times as much on the same balance.

• Federal insurance covers up to $250,000: The FDIC (banks) and NCUA (credit unions) protect deposits per depositor, per institution, per ownership category — but money market funds aren't insured.

• Treasuries are government-backed and flexible: T-bills, T-bonds and inflation-protected TIPS carry very low default risk, and you can sell before maturity — though at the current market price, which may be more or less than you paid.

• Inflation is the real risk: Even with no chance of loss, your purchasing power can erode if your APY trails inflation — a particular concern with long CDs.

Summary generated by AI, verified by MoneyLion editors

What Are Low-Risk Ways To Earn Interest?

Here are the six best low-risk ways to earn more interest on your money, ranked by everyday usefulness.

1. High-yield savings accounts (HYSA)

2. Rewards checking accounts

3. Money market accounts (MMA) or money market funds

4. Certificates of deposit (CD)

5. U.S. Treasury bills and Treasury bonds

6. Treasury Inflation-Protected Securities (TIPS)

These options give you reliable, predictable returns instead of high growth potential, which is why their yields generally lag behind riskier assets. In exchange for knowing you won’t lose money during a market downturn (as is the case with, say, stocks), you’ll get a lower return. An ideal low-risk investment protects your money while giving you steady, modest interest as a bonus.

Two numbers do a lot of the work in this guide. The FDIC and National Credit Union Administration (NCUA) insure deposits up to $250,000 per depositor, per bank/credit union, per ownership category. And the current national average savings account rate is just 0.38%, according to the FDIC — which is why moving your cash to a higher-paying account can pay off fast.

Use this table to compare the six options at a glance.

Rates and terms last checked August 2026.

High-Yield Savings, Rewards Checking and Money Market Accounts for Short-Term Cash

The low-risk options that meet the above criteria have widely varying accessibility terms. If you think you’ll need that money in the near future, liquidity may be your primary concern — above even the return rate.

High-Yield Savings Accounts (HYSA)

A high-yield savings account (HYSA) is ideal for an emergency fund when you want to keep things extremely liquid. They’re FDIC- or NCUA-insured, and they pay considerably more than a traditional savings account.

Here is what the gap looks like in real dollars. Park $10,000 for one year in a traditional savings account paying the 0.38% national average, and you earn about $38 in interest. Move that same $10,000 into a high-yield savings account paying 4.50%, and you earn about $450 — nearly 12 times as much for the same balance.

Rewards Checking Accounts

A rewards checking account is best for those who already use debit frequently. You'll often earn a flat percentage back on specific purchases, which can be even more lucrative than a high-yield deposit account depending on your spending. Just check the strings attached: the top APY or cash back usually requires a set number of monthly debit transactions, a direct deposit or e-statements, and it often applies only up to a balance cap, with anything above earning a much lower rate.

Money Market Accounts (MMA) or Money Market Funds 

A money market account (MMA) is a hybrid of a high-yield savings account and a checking account. Depending on the financial institution, you’ll get the excellent APY of a HYSA while also being able to access your money by check and debit card.

A money market fund, on the other hand, is a mutual fund — usually held at a brokerage — that invests in short-term government and corporate debt. Share prices are designed to hold steady at $1, but in a rare stress event a fund can "break the buck" and dip below that, so you can lose a small amount of principal. A money market fund isn't FDIC-insured. If the brokerage itself fails, Securities Investor Protection Corporation (SIPC) may cover the account — but SIPC protects against the firm's failure, not against the fund's share price falling.

CDs, Treasurys and TIPS for Cash You Can Lock Up 

If you’re certain you won’t need the cash you invest for a long while (think months or years), you can typically get a higher return in exchange for limited access for a fixed length of time.

Certificates of Deposit (CD)

Certificates of deposit (CDs) are best suited to those who want to lock in a high APY for a lengthy period and are willing to leave the money untouched for a while to achieve it. You can choose between short-term and long-term CDs, with maturities typically ranging from three months to five years. If you elect to take out your money early, you’ll usually be slapped with a hefty early withdrawal penalty.

Treasury Bills (T-Bills) and Treasury Bonds (T-Bonds)

Treasury bills (T-bills) and Treasury bonds (T-bonds) are government-backed securities. T-bills mature in one year or less, while T-bonds run up to 30 years. Unlike a CD, there's no early-withdrawal penalty if you sell before maturity — but you sell at the current market price, which can be higher or lower than you paid, since a fixed-rate Treasury loses value when interest rates rise. You also can't sell directly through TreasuryDirect; you'd transfer the security to a brokerage first, and Treasuries bought through TreasuryDirect can't be transferred or sold for the first 45 days.

Treasury Inflation-Protected Securities (TIPS)

Treasury Inflation-Protected Securities (TIPS) are popular among those worried about inflation. They automatically adjust their principal value based on how inflation erodes the dollar.

How Safe Is “Low-Risk”?

Savings accounts, CDs and MMAs are typically insured by either the FDIC (for banks) or the NCUA (for credit unions). That makes them safe for up to $250,000 per account owner, per institution, per ownership category in the event the financial institution fails.

Not all high-yield options have this feature, however. Again, U.S. Treasuries are government-backed, so there’s very little chance of default. And bond funds and money market funds, while still considered extremely conservative, come with a different kind of risk: moving share prices that can (very rarely) result in losing some of your principal.

Perhaps the biggest danger to your low-risk investment is losing ground to inflation. It’s conceivable that inflation will outpace your earnings — so while you won’t technically lose money, your purchasing power can deteriorate over time. This is especially risky with CDs, where you pledge not to touch your money for an extended period.

How To Choose the Right Low-Risk Option for Your Goal

To choose the right low-risk option for your goal, first identify what the money is for:

• For an emergency fund, prioritize two things: liquidity and safety. A high-yield savings account tends to be one of the safest ways to earn interest, as you can access the cash quickly — and it’s FDIC-insured.

• If you’ll need the money in several months to a few years, CDs or Treasuries with a strategic maturity can lock in a good rate with minimal risk.

• If you’re in between investments and want to earn high APY while you decide, a money market fund or money market account can be a good choice.

• If your primary goal is a steady income, certain bond funds or annuity-like options may make the most sense. They can be complicated, though — from things like ongoing costs to rules about when you can access your money. Be sure you understand what you’re getting into before you commit.

Common Mistakes To Avoid

When it comes to low-risk ways to grow your money, there are a couple of easy mistakes to make.

• Make sure you don’t leave too much cash in accounts with low APY. A simple move to a higher-yield account can add up quickly.

• Don’t tie up your emergency savings in anything with early-withdrawal penalties (or otherwise slow access). Life happens, and you need to be able to pull from that fund at a moment’s notice.

• Don’t assume all “money market” accounts are the same. Money market funds aren’t FDIC-insured like MMAs at banks. 

• Don’t chase the highest advertised rate without first reading the fine print. It’s critical to understand the fee schedule, balance requirements and withdrawal rules.

Bottom Line

Finding the best low-risk ways to earn more interest on your money is about balancing your needs with a strong APY. Think about safety, how quickly you might need your money and the return you can get without relinquishing your flexibility.

For most folks, a high-yield savings account is the best default for everyday cash. It’s familiar and relatively easy. But CDs, money market accounts (or funds) and Treasuries might make more sense for certain situations — like cash you can stand to float for a while.

FAQs About Low-Risk Ways To Earn Interest

What is the safest way to earn interest on money?

The safest options are FDIC- or NCUA-insured savings accounts, CDs and money market accounts, plus U.S. Treasury securities backed by the federal government. All protect your principal up to at least $250,000.

Are CDs safer than savings accounts?

CDs aren’t inherently safer than savings accounts. Both carry the same FDIC insurance up to $250,000, so they are equally safe. The main tradeoff is that a CD locks in your rate but charges a penalty if you withdraw early.

Do you pay taxes on interest from these accounts? 

Yes, interest from savings accounts, CDs and money market accounts is taxed as ordinary income at the federal level. Treasury interest is federally taxed but exempt from state and local income tax.

Can you lose money in a high-yield savings account?

No, as long as your bank or credit union is FDIC- or NCUA-insured and your balance stays under $250,000 per depositor, per bank. The APY can drop over time, but your principal is protected.

Is a money market account better than a savings account? 

A money market account often pays a similar or slightly higher APY and adds check-writing or debit card access. A high-yield savings account usually wins on rate for smaller balances. Here’s a comparison of money market accounts vs. savings accounts to help you decide.

Key Terms

• Low-risk investment: A conservative option where losing meaningful principal is highly unlikely, such as an insured deposit account or a Treasury security.

• High-yield savings account (HYSA): An FDIC- or NCUA-insured, highly liquid account that pays far more than a traditional savings account.

• Money market account (MMA): An insured deposit account that blends savings and checking features, often with check-writing or debit access.

• Money market fund: A low-risk brokerage investment in short-term debt — not federally insured, so in rare stress events it can lose value ("break the buck").

• Certificate of deposit (CD): A fixed-term, fixed-rate deposit account with a penalty for withdrawing before maturity.

• Treasury securities: Government-backed T-bills and T-bonds, backed by the full faith and credit of the U.S. government; you can hold them to term or sell early on the secondary market at the current price, which may be above or below what you paid.

• TIPS: Treasury Inflation-Protected Securities that adjust their principal value with inflation to protect your purchasing power.

• FDIC/NCUA insurance: Federal coverage protecting deposits up to $250,000 per depositor, per institution, per ownership category.

• Liquidity: How quickly you can access your money without a penalty or loss of principal.

Sources

• FDIC: National Rates and Rate Caps

• FDIC: Deposit Insurance 

• NCUA: Share Insurance Fund 

• TreasuryDirect: Treasury Marketable Securities

• SEC (Investor.gov): Money Market Funds

Summary generated by AI, verified by MoneyLion editors

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