How To Invest In 2024 With Guaranteed Returns

Now that we’re freshly into 2024, it is a good time for financial resolutions and looking at ways to be more financially healthy. With inflation and soaring rates, many Americans’ wallets have been hit this year — taking a toll on their budgets and savings.

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In turn, finding safe investments that can provide guaranteed returns is something many might be after, but knowing how to find these may be tricky.

Here are some ways to invest with guaranteed returns, according to experts.

CDs

“If you’re on the hunt for a surefire return in 2024, your safest play is to consider locking in CD rates, bonds, or money market accounts that are currently yielding between 4% and 6%,” said Joe Camberato, CEO, National Business Capital. “As far as investments offering guaranteed returns without shouldering any risks, these traditional options remain your go-to.”

He added that it’s becoming increasingly challenging to identify alternatives that provide comparable interest rates while shielding yourself from risk.

Looking ahead, Federal Reserve Chair Jerome Powell has hinted at a rate reduction in 2024 — and while the prospect looms, there’s still a window of opportunity to secure these rates before the inevitable adjustment, Camberato said.

“So, consider making your move before these products begin to yield less when rates go down,” he added.

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High-Yield Savings Accounts (HYSAs)

The easiest guaranteed return in 2024 has to be a high-yield savings account, CD, Treasury, or money market, according to Jay Zigmont, PhD, CFP, founder of Childfree Wealth, as you are guaranteed to get the interest specified.

He noted, however, to keep in mind that the interest in HYSAs is variable so it will shift over time.

Paying Off Your Debt

Another — and simpler — way to secure guaranteed returns is to pay off your debt.

“Remember that paying off your debt is not only a guaranteed return, but it is tax-free,” Zigmont said. “If you pay off your credit cards, you are effectively getting a return of the interest you would have paid, and you don’t pay tax on it.”

Bonds

Christopher Sargent, portfolio manager and research analyst, Bradley, Foster & Sargent, said that we haven’t seen interest rates this high for quite some time.

“It’s a really great time to invest in safer, higher quality securities. At the same time, investors no longer have to settle for 2% or 3% interest on bonds, so bonds are a much more viable option than they were a few years ago,” he said.

According to him, a good approach can be tiered-out government bonds with a high yield and high safety threshold, especially when coupled with high-quality securities. He described these as “stocks that have a high barrier to entry or an asset that can’t be replicated in the near or even long term tend to have a lower risk profile.”

“For instance, rail freight might have a tough year, but regulation makes it very difficult to build a new railroad, so there’s some degree of stability built in,” he added.

He further noted that there may be opportunities to add bonds from high-quality companies to your portfolio.

“As interest rates have risen, most companies have paused issuing debt. In 2024, I think we’re likely to see quality companies issuing high-paying bonds,” he said. “These can be a good compliment to government bonds in a portfolio. Keep an eye out for bonds from high-quality, profitable companies.”

Mega-Cap Stocks

Mega-cap stocks — stocks of companies that have a market capitalization of $200 billion or more — that are high quality, have great credit ratings and are able to pay a dividend are a good place to look right now, Sargent said.

“Even if the next six months are bumpy, major trends like AI and onshoring are putting a lot of mega-cap stocks in tech and the industrial space in a very strong position to be able to do better two or three years down the line than they are right now,” he said.

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This article originally appeared on GOBankingRates.com: How To Invest In 2024 With Guaranteed Returns