Starting your investment journey in your 20s is one of the best decisions you can make for your future. The good news? You don’t have to throw all your savings into risky stocks or complicated investments to see growth. Low-risk options exist—they’re beginner-friendly, less stressful, and still help your money grow steadily over time. Here are five low-risk investments perfect for anyone dipping their toes into the financial waters.

1. High-Yield Savings Accounts (HYSAs)

High-yield savings accounts are like regular savings accounts, but better—they offer higher interest rates, which means more cash for you.

  • Why It’s Great: Your money stays safe, easily accessible, and grows passively.
  • Potential Returns: Interest rates can go from 3-5% annually, depending on the account and market conditions.
  • Getting Started: Many online banks offer HYSAs with no fees or minimum balances, making it super easy to set one up.

Think of it as a risk-free way to park your emergency fund or stash away money for short-term goals, like traveling or upgrading your tech.

2. Index Funds

If you’ve heard about the stock market but are intimidated by it, index funds are your new best friend. These funds follow the performance of a stock market index, like the S&P 500, so your investment spreads across many companies.

  • Why It’s Great: They’re easy to manage, diversified (which minimizes risk), and typically have low fees.
  • Potential Returns: Average long-term returns hover around 7-10% annually.
  • Getting Started: Use platforms like Vanguard, Fidelity, or your own brokerage app to invest in index funds.

The best part? It’s a “set it and forget it” kind of deal—perfect for busy 20-somethings who don’t have time for constant stock monitoring.

3. Certificate of Deposit (CDs)

A Certificate of Deposit is basically lending money to the bank for a fixed time (say, 6 months or 2 years), and in return, they pay you interest.

  • Why It’s Great: Risk-free and offers higher returns than most savings accounts.
  • Potential Returns: Rates depend on the term length (average 3-5%), but your return is guaranteed.
  • Getting Started: Visit your bank or credit union to compare their CD rates and durations.

Remember, your money will be “locked up” for the term length, so this is best for money you don’t need immediately.

4. Target-Date Funds

Target-date funds are like autopilot for your investments. You choose a fund with a “target date” close to when you plan to withdraw (say, retirement in 2050), and it adjusts over time. It starts aggressive while you’re young, then shifts to safer investments as you age.

  • Why It’s Great: It’s hands-free and tailored to your timeline.
  • Potential Returns: Similar to index funds, with long-term growth averaging between 6-8%.
  • Getting Started: These are commonly found in 401(k) plans or through investment accounts like Fidelity or Betterment.

Investing doesn’t get much easier than this—you can sit back and watch it grow over the years.

5. Treasury Bonds

Treasury bonds are loans you give to the government (yes, Uncle Sam pays you back with interest). They’re backed by the U.S. government, so they’re considered one of the safest investments out there.

  • Why It’s Great: Guaranteed returns and no risk of losing your initial investment.
  • Potential Returns: Typically range from 2-5%, depending on the bond.
  • Getting Started: You can buy treasury bonds directly from TreasuryDirect.gov or through your investment platform.

This is a great choice if you want your money to grow steadily over a longer period while keeping it ultra-safe.

Why Low-Risk Works for Beginners

If you’re new to investing, starting with low-risk options builds your confidence while protecting your hard-earned money. It’s like training wheels for your financial bike—safe but effective. Plus, the earlier you start investing, the more time your money has to grow through compound interest.

Kickstart your investment future with one (or a mix) of these strategies, and watch your financial goals get closer. Your 30-year-old self will thank you!