Business

Options for Investing Money in a Low Interest Rate Environment

Today, it seems that interest rates are consistently low. When you have to face such a challenging financial environment, it can be difficult to form a reliable plan to meet your goals as an investor. However, there are many different resources that you can turn to if you need an idea of where to begin. Whether you consult Donald Gayhardt, an accomplished leader in the financial services sector, or helpful books on the subject, you can make progress towards your short-term and long-term goals. Here are some of the options that you have for investing money in a low interest rate environment.

Certificates of Deposit (CDs)

A certificate of deposit, or a CD, is a certificate that is issued by a bank to a person who is depositing money for a certain period of time. Because CDs are insured, they tend to be favored by people who prefer a low-risk option for investing money. Investing in a CD gives you the opportunity to have a fixed rate of interest, which is typically higher than that of other flexible accounts. However, there are several drawbacks of CDs. There is a penalty for early withdrawals, which makes it difficult for investors to easily access their money, and returns for CDs are relatively low. It’s best to evaluate your personal goals and decide if investing in a CD would be right for you.

Preferred Stocks

Another option is to invest in preferred stocks, which are investments that pay out fixed dividends and follow a regular schedule. Preferred stocks differ from CDs in that they can often be postponed or skipped altogether without forcing you to pay a penalty. Moreover, preferred dividends are typically paid to you before any other common stockholders. If the company runs into any issues, you may be able to have a preference when claiming the assets as a stockholder. This provides you with a layer of protection that allows you to receive money even in the unpredictable situation of low interest rates.

Stock Dividends

When dealing with low interest rates, stock dividends can be a useful investment option. Turning to companies that pay high dividends gives you a sense of security when low interest rates make your financial situation seem unpredictable. In fact, stock dividends typically perform well during challenging financial circumstances, making them a worthwhile option for investment. However, it’s crucial to ensure that you make your choice carefully when investing in stock dividends. Before you choose a company, be sure to confirm that they are stable and reliable.

Real Estate

Investing in real estate is a smart choice when you’re in a low interest rate environment. Similarly to CDs, real estate is a low-risk option that also comes with high returns in the long term. Choosing to invest in real estate can be a highly useful decision if you prefer safety and security when investing money. Regardless of whether you choose residential, commercial or rental, real estate may be a choice that provides you with the financial security that you desire.