Smart Ways to Grow Your Money Without the Stock Market

If you're looking to grow your money without the volatility of the stock market, you have several proven options that offer solid returns while protecting your principal. These safe investment strategies can help you build wealth steadily without the sleepless nights that come with market swings.

High-Yield Savings Accounts and Money Market Accounts

High-yield savings accounts are your best starting point for safe money growth. These accounts currently offer 4.5-5.5% APY - that's 10 times more than traditional banks pay.

Your money stays completely safe with FDIC insurance up to $250,000 per account. This means even if the bank fails, the government guarantees your cash back. Online banks like Marcus by Goldman Sachs and Ally consistently offer the highest rates because they don't pay for physical branches.

Here's the simple process: Open an account online in 10 minutes, transfer your money, and watch it grow automatically. A $10,000 deposit earning 5% becomes $16,289 after 10 years without adding another penny.

Finding the Best High-Yield Accounts

SuperMoney's savings account comparison shows current rates from top providers. Look for accounts with no monthly fees and low minimum balances.

Marcus by Goldman Sachs offers 4.5% APY with no minimums. Ally Bank provides 4.25% plus excellent customer service. Capital One 360 gives 4.3% with easy mobile banking.

Watch out for promotional rates that drop after six months. Read the fine print to understand when rates might change.

Finding the best high-yield savings rates requires ongoing research and flexibility. Banks frequently adjust their rates based on Federal Reserve changes and competitive pressure.

Start by comparing rates across multiple online banks monthly. Don't just look at the headline APY - check for minimum balance requirements and monthly fees that can eat into your returns.

Promotional rates often last 3-12 months before dropping to standard rates. For example, a bank might offer 5.5% APY for new customers but drop to 4.2% after six months. Smart savers move their money when promotions end - there's no loyalty reward for staying with lower rates.

Online banks consistently offer rates 10-15 times higher than traditional brick-and-mortar institutions. This gap exists because online banks have lower overhead costs and can pass savings to customers through better rates.

The trade-off comes in accessibility and services. Online banks typically limit withdrawals to ACH transfers that take 1-3 business days. Traditional banks offer immediate cash access through ATMs and branches. Consider keeping a small emergency fund ($1,000-2,000) at a local bank for immediate needs while maximizing returns on larger amounts through online accounts.

Wise's high-yield account offers 3.92% APY with the flexibility of a multi-currency account - perfect if you travel internationally or receive payments in foreign currencies. Their debit card provides global access without foreign transaction fees.

Maximizing Your FDIC Coverage

Smart savers spread money across multiple banks to maximize FDIC protection. You get $250,000 coverage per bank, so $500,000 stays protected across two institutions.

Consider adding a spouse's name to accounts for even more coverage. Joint accounts get separate $250,000 protection per person.

Money market accounts work similarly to high-yield savings but often include check-writing privileges. They typically require higher minimum balances but offer slightly better rates.

Certificates of Deposit (CDs) and CD Laddering

CDs lock in guaranteed returns for specific time periods. Current rates range from 4% for 6-month CDs to 5.5% for 5-year terms.

The trade-off is simple: higher rates for longer commitments. You can't touch your money without paying penalties, but you know exactly what you'll earn.

Quontic Bank offers competitive CD rates with terms from 6 months to 5 years. Their 18-month CD currently pays 5.15% APY.

Building a CD Ladder Strategy

CD laddering solves the liquidity problem while maximizing returns. Here's how it works with $25,000:

• Put $5,000 in a 1-year CD at 4.5%
• Put $5,000 in a 2-year CD at 4.8%
• Put $5,000 in a 3-year CD at 5.0%
• Put $5,000 in a 4-year CD at 5.2%
• Put $5,000 in a 5-year CD at 5.5%

Every year, one CD matures and you reinvest at current rates. After five years, you have access to $5,000 annually while earning top rates.

Start your ladder by determining how much liquidity you need annually. If you need $5,000 accessible each year, that's your ladder rung size.

Purchase your first set of CDs with terms ending 12 months apart. As each CD matures, reinvest the principal plus interest into the longest-term CD in your ladder. This strategy gives you annual access to funds while maximizing your average return rate.

When CDs mature, you've got options. If rates have dropped, consider high-yield savings accounts temporarily. If rates climbed, reinvest into longer terms. The key is staying flexible while your money keeps growing.

Specialty CD Options

Not all CDs are created equal. Bump-up CDs let you increase your rate once during the term if rates rise. They're perfect when you think rates might climb but don't want to wait.

No-penalty CDs offer complete liquidity without fees but usually pay 0.5-1% less than regular CDs. They work well for emergency funds when you want guaranteed returns with full flexibility.

Credit unions often beat bank CD rates by 0.25-0.75%. SuperMoney's CD comparison tool helps you find the highest rates across different institutions. Jumbo CDs requiring $100,000+ minimums typically add another 0.1-0.25% to your rate.

Key Features Comparison

Government and Corporate Bonds

Treasury securities are the safest investments on Earth - backed by the full faith of the U.S. government. Current yields range from 4.5% for 2-year notes to 4.7% for 10-year bonds.

You can buy directly from TreasuryDirect.gov without fees. The minimum purchase is just $100, making bonds accessible to any investor.

Treasury bills (under 1 year), notes (2-10 years), and bonds (20-30 years) offer different time horizons. Interest is exempt from state and local taxes.

How to Buy Treasury Securities

Create a free TreasuryDirect account online. You can schedule automatic purchases or buy during weekly auctions. The government pays interest every six months directly to your bank account.

I Bonds deserve special mention for inflation protection. They currently pay 5.27% and adjust with inflation. You can buy up to $10,000 per year per person.

Treasury securities come in three main types based on maturity length. Treasury bills mature in one year or less, notes mature between 2-10 years, and bonds extend 20-30 years.

Setting up a TreasuryDirect account takes about 10 minutes online. You'll need your Social Security number, bank account information, and a valid email address.

Treasury auctions happen regularly throughout the year. You can place competitive bids (specifying your desired yield) or non-competitive bids (accepting whatever rate is set). Most individual investors choose non-competitive bids to guarantee their purchase.

Interest payments arrive every six months directly to your bank account. At maturity, you receive your full principal back automatically.

Pro tip: You can ladder Treasury securities just like CDs. Buy a mix of 1, 2, 3, 4, and 5-year notes. Each year when one matures, reinvest in a new 5-year note to keep earning higher rates.

For smaller investors who want Treasury exposure without the $100 minimums, consider Treasury ETFs through platforms like Acorns. These funds hold baskets of government bonds and pay monthly dividends.

Corporate Bonds and Investment-Grade Options

Corporate bonds pay higher yields than Treasuries because companies carry more risk than the government. Investment-grade corporate bonds currently yield 4.5-6% depending on the company's credit rating.

Credit ratings range from AAA (highest quality) down to BBB- (lowest investment grade). Companies like Microsoft and Johnson & Johnson typically receive AAA or AA ratings. Stick to investment-grade bonds rated BBB- or higher to minimize default risk.

You can buy individual corporate bonds through most brokers, but minimum purchases often start at $1,000-$5,000. Bond funds and ETFs let you diversify across hundreds of corporate bonds with smaller initial investments.

Investment-grade corporate bonds typically yield 1-2% more than comparable Treasury securities. Companies like Apple, Microsoft, and Johnson & Johnson issue these bonds with strong credit ratings (AAA to BBB). High-yield bonds, also called "junk bonds," offer even higher returns but carry significantly more risk of default.

Credit rating agencies like Moody's, S&P, and Fitch evaluate corporate bonds on a scale from AAA (highest quality) to D (default). Understanding these ratings helps you balance risk and return.

Companies can be downgraded during economic stress. Ford Motor Company, for example, was downgraded to junk status in 2020 but has since recovered to investment-grade. Monitor your bond holdings through platforms like SuperMoney to track performance and ratings changes.

Most online brokers offer corporate bond trading, including Fidelity, Schwab, and Vanguard. These platforms typically charge $1 per bond for transactions. You can also access bonds through robo-advisors that automatically build diversified portfolios.

For beginners, bond ETFs offer the easiest entry point. They trade like stocks during market hours and provide instant diversification. Consider starting with broad market bond funds before moving to sector-specific or credit-quality focused funds.

Bond Funds vs. Individual Bonds

Bond funds offer instant diversification and professional management. The Vanguard Total Bond Market ETF (BND) holds over 10,000 bonds and charges just 0.03% in annual fees.

Individual bonds provide predictable income and return your principal at maturity (assuming no default). Bond funds don't have maturity dates, so their value fluctuates with interest rates.

If rates rise, bond prices fall - but you can hold individual bonds to maturity and avoid losses. Bond funds must buy and sell constantly, making them more sensitive to rate changes.

Bond funds provide instant diversification for smaller investors. You can start with as little as $100 in most bond ETFs, compared to $1,000+ for individual corporate bonds. Popular bond ETFs like Vanguard Total Bond Market (BND) or iShares Core U.S. Aggregate Bond (AGG) spread risk across hundreds of bonds.

Individual bonds offer predictable income if held to maturity. You'll receive regular interest payments and your principal back at maturity, assuming the company doesn't default. Bond funds don't have maturity dates and their values fluctuate daily.

For amounts under $10,000, bond funds make more sense due to diversification benefits.

Tax Considerations for Bond Investors

Treasury securities are exempt from state and local taxes, but you'll pay federal income tax on the interest. This makes them especially attractive for investors in high-tax states like California or New York.

Corporate bond interest gets taxed as ordinary income at both federal and state levels. Consider holding bonds in tax-advantaged accounts like IRAs to defer or eliminate these taxes.

Municipal bonds from your home state often provide tax-free income, but yields are typically lower than taxable alternatives. Calculate the tax-equivalent yield to compare properly: divide the municipal yield by (1 - your tax rate).

Real Estate Investment Trusts (REITs)

REITs let you own real estate without buying property directly. These companies own apartments, offices, warehouses, and shopping centers, then pay out 90% of profits as dividends.

Current REIT dividend yields average 6-8% annually. That's higher than most bonds with potential for price appreciation too.

You can buy REIT shares through any brokerage account just like stocks. Popular options include Realty Income (O), which pays monthly dividends, and Vanguard Real Estate ETF (VNQ) for broad exposure.

Types of REITs and Performance

Equity REITs own and operate income-producing real estate like apartments, shopping centers, and office buildings. They're the most common type and typically offer dividend yields between 3-7%. Residential REITs focus on apartment complexes and single-family rentals, while commercial REITs target office spaces and retail properties.

Mortgage REITs (mREITs) don't own property directly. Instead, they finance real estate by purchasing mortgages and mortgage-backed securities. These often provide higher yields of 8-12% but carry more interest rate risk. Think of them as the middleman earning the spread between borrowing costs and mortgage rates.

Hybrid REITs combine both strategies, owning properties and financing real estate deals. They offer a balanced approach but can be harder to analyze since you're getting exposure to both business models.

Here's how major REIT sectors have performed historically:

Healthcare REITs own hospitals, medical offices, and senior living facilities. They're considered defensive since people always need healthcare. Companies like Welltower and Ventas dominate this space.

Industrial REITs benefit from e-commerce growth by owning warehouses and distribution centers. Prologis, the largest industrial REIT, has delivered exceptional returns as online shopping exploded.

Data center REITs like Digital Realty Trust capitalize on cloud computing demand. They've been top performers but trade at premium valuations.

Commercial REITs focus on office buildings, retail centers, and warehouses. Industrial REITs have performed best recently due to e-commerce growth.

Healthcare REITs own hospitals and senior living facilities. They offer stable income from long-term leases with built-in rent increases.

REIT Investment Strategies

You can buy individual REITs through any brokerage account. Most require just the cost of one share to start investing.

REIT ETFs offer instant diversification. The Vanguard Real Estate ETF (VNQ) holds over 160 REITs for a 0.12% annual fee. This spreads your risk across multiple properties and REIT types.

Direct REIT purchases let you target specific sectors. You might buy a healthcare REIT if you believe in aging population trends, or a data center REIT for tech growth exposure.

You can access REITs through multiple platforms, each offering different advantages for your investment style.

Direct REIT purchases let you buy individual companies through any brokerage account. You'll own shares directly and receive quarterly dividend payments. Popular platforms like Moomoo offer commission-free REIT trading with research tools to analyze dividend yields and performance history.

REIT ETFs provide instant diversification across dozens of properties and management companies. The Vanguard Real Estate ETF (VNQ) holds over 160 REITs with an expense ratio of just 0.12%. You can start with as little as $100 and automatically spread risk across residential, commercial, and specialty real estate sectors.

For beginners, REIT funds make more sense. Here's why:

• Lower minimum investment ($1 vs. $50+ per share)
• Built-in diversification across property types
• Professional management handles the research
• Less volatility than individual REITs

Publicly traded REITs are the easiest to buy and sell. They trade on stock exchanges like regular companies. You get daily liquidity and transparent pricing.

Investment Minimums and Fee Structures

• Individual REITs: No minimum beyond share price (typically $20-200 per share)
• REIT ETFs: One share minimum (typically $20-100)
• Private REITs: $25,000+ minimum
• Robo-advisor REIT exposure: $1-100 minimum through apps like Monefy for expense tracking alongside your investing strategy