A Simple Guideline for Safe, Low-Risk Investing
- INTEGFI
- Aug 26, 2025
- 3 min read
When it comes to saving money for the next few years, safety often matters more than chasing high returns. Whether it’s for a house down payment, tuition, or simply keeping savings steady during uncertain times, the goal is the same: earn some interest while protecting principal.
There are three main choices worth considering:
Certificates of Deposit (CDs)
Money Market Accounts
Brokerage accounts that can hold CDs, Money Market Funds, or other fixed-income products
Each has its place, depending on how much flexibility you need and how long you can keep the money set aside.
Certificates of Deposit (CDs)
A Certificate of Deposit (CD) is one of the most straightforward saving tools. You deposit money at a bank or credit union for a fixed period (anywhere from a few months to several years) and receive a guaranteed interest rate.
Why it works: The fixed rate means you know exactly what you’ll earn, and CDs are FDIC/NCUA insured up to $250,000 per depositor per institution.
Drawbacks: CDs lock up your money. If you need it early, you’ll likely pay an early withdrawal penalty (unless you bought a brokered CD, which can be sold on the secondary market).
Best for: People who don’t need immediate access to the money and want certainty.
Money Market Accounts
A Money Market Account (MMA) is a type of savings account offered by banks. It usually pays more than a standard savings account and may offer check-writing or debit card features.
Why it works: MMAs are liquid and FDIC/NCUA insured. You can usually access funds at any time, making them a good balance between safety and flexibility.
Drawbacks: The interest rate is variable, so it can rise or fall with market conditions. Over the long run, CDs may offer better returns if you’re willing to commit money for a set term.
Best for: Emergency funds or savings you might need on short notice.
Brokerage Accounts (Fixed-Income Options)
Opening a brokerage account expands your toolbox beyond traditional bank products. Here are three common low-risk vehicles available:
Brokered CDs
These are issued by banks but purchased through a brokerage. They carry FDIC insurance like bank CDs but can be sold before maturity in the secondary market. Instead of a penalty, you might sell at a premium or discount depending on interest rates.
Money Market Funds (MMFs)
Brokerages also offer money market funds. Unlike bank accounts, these are investment funds that pool cash into short-term, high-quality securities like U.S. Treasuries. They’re not FDIC insured, but they’re designed to be very safe and liquid. Yields generally track short-term interest rates.
Other Fixed-Income Products
For those comfortable with slightly more fluctuation, a brokerage account can also hold Treasury bills, Treasury notes, municipal bonds, or bond ETFs. These allow you to choose maturities that match your time horizon, but market values can rise or fall with interest rates.
How to Choose the Right Option
CDs: Best if you can commit to a fixed period and want a guaranteed return.
Money Market Accounts: Best if you need liquidity and insurance, and are okay with variable rates.
Brokerage Account Options: Best if you want flexibility, access to a broader range of products, and can tolerate slight price movement in exchange for choice and yield.
Conclusion
There isn’t a one-size-fits-all answer when it comes to where to save for mid-term goals. The key is balancing safety, liquidity, and yield. By understanding CDs, money market accounts, and brokerage fixed-income tools, you can pick the mix that fits your timeline and risk tolerance.
