Investing and identifying investment options are often at the top of the priority list for those exploring ways to increase their wealth and watch their money grow. Investing gives you financial freedom, secures your wealth, and increases the value of your money over time. Therefore, choosing the right investment options can go a long way to ensuring your finances are always in the green. However, research has shown that about 90% of Americans want to start investing but don’t know where to start. If you fall within this demographic, this article is for you.

Here are five profitable investment options to consider if you’re a newbie to investing. 

  1.   Government Bonds

Simply put, government bonds are loans from you to the government in return for an agreed interest rate. This debt-based investment is usually ideal for newbies because it is considered risk-free as the government backs them. Although government bonds typically have lower returns (due to the lower risk involved), their liquidity makes it easy to resell them on the secondary bond market. You can consider several types of government bonds if you choose to make this one of your investment options. These include Treasury bonds, Treasury notes, Treasury-Inflation Protected Securities (TIPS), and Saving bonds. You can purchase government bonds from a broker, bank, or the U.S. Treasury. 

    2. Cryptocurrencies

Another type of investment that is beginner-friendly and more modern is cryptocurrencies. This digital currency (also known as coins) is secured by blockchain technology and doesn’t require the authorization of a bank or financial institution to make transactions. The introduction of cryptocurrencies goes back to 2009 when the faceless Satoshi Nakamoto created Bitcoin. However, several other cryptocurrencies and crypto investing options have popped up over the years. For example, you can invest in cryptocurrencies by buying the coins directly. With this option, it is vital to check and monitor the price of the coin. For instance, if you wish to buy HBAR, knowing the HBAR market price will help determine if this is a worthwhile investment. Other ways to invest in cryptocurrencies include becoming a crypto miner or validator and investing in crypto funds and companies. 

          3. High-Yield Savings Accounts

This investment is just like regular savings accounts but with a twist. Whereas the interest rates of your regular savings account are quite low, a high-yield savings account offers you much higher returns. This means you enjoy the perks of increasing your wealth without the associated risk. Therefore, a high-yield savings account is an excellent way for new investors weary of other investment channels to increase their wealth. Again, like the traditional savings account, you can make deposits to and withdrawals from (albeit limited) a high-yield savings account. To open a high-yield savings account, you must deposit a minimum of $100 with a bank or credit union, as these are the only institutions that offer this investment option. Online banks generally offer higher rates because these institutions have lower operational costs making it easier to offer such high-interest rates. However, before selecting an institution to create your account, shopping for a reputable institution offering high-interest rates is advisable. 

4.   Certificate of deposit 

Another form of savings account you should consider when selecting an investment option is the certificate of deposit. The certificate of deposit, or CD, is a form of savings account that allows you to earn interest on a lump sum amount of money over a fixed period, be it a few months to a couple of years. Once the time prescribed for CD has lapsed, you can redeem your principal amount and the accumulated interest. However, knowing and understanding the four primary CD investment options is vital before starting a certificate of deposit account. These are Fixed-rate Certificates, Variable Certificates of Deposit, Bump-Up Certificates, and No-penalty CDs– also known as Liquid Certificates of Deposit. 

 5.  401(k)

One of the main objectives of investing is to secure your financial future. The last thing you want is to work for years beyond your preferred retirement age out of fear of not having enough income to live on. This is where a 401(k) comes in. A 401(k) is a retirement investment fund that some companies offer. Employees who participate in a 401K  are required to pay (invest) a specified percentage of their income. Making this investment option ideal for new investors as they do not need to worry about defaulting on contributions, and it is a relatively safer investment option. There are two main types of 401(k) plans. The first is traditional, which is pre-tax. This means contributions are not taxed; instead, you’ll be taxed when withdrawing from the retirement fund. The second type of 401(k) is the Roth plan. With this plan, contributions are taxed upfront, so you don’t have to worry about paying taxes when withdrawing from the fund during retirement. 

Which of these investment options are you most interested in?