Best Investments: Where to Invest in 2025
There are a lot of ways to invest money — high-yield savings accounts, CDs, bonds, funds, stocks and gold are all options. The best investment for you depends on investment goal, timeline and other factors.
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When investing becomes a roller coaster ride — as it has this year, with steep market reactions to tariffs and recession fears — it's more important than ever to focus on proven, diversified investments that will help you ride the highs and lows.
But what's the best way to invest? That answer is unsatisfying: It depends.
There is one piece of advice that remains steady even when the market isn't, and that's to avoid timing the market or trying to buy the best investment at the right time. It often backfires. Instead, focus on the best investments for your goals, which don't change with every market whim.
» Just getting started? Learn about the best beginner investments
But first, what's a 'good' investment return?
Returns will vary based on a number of factors, including what you're invested in, how that industry is doing, and the overall health of the economy. Your returns will even vary within the same type of investment — one oil stock won't perform exactly the same as the next, for example. However, here's some general guidance as to what you can expect from some of the investments listed below.
- High-yield savings accounts: 3% to 4%+.
- CDs: 3% to 4%+, depending on term.
- Bond mutual or index funds: 3% to 4% for U.S. government bonds; more for riskier bonds.
- S&P 500 (an index of U.S. large-cap stocks): 10% long-term historical average annualized return.
11 best investments right now
Here are the best investments, roughly ordered from lowest risk to highest. Keep in mind that lower risk typically also means lower returns, while taking more risk is likely to offer you a better return on your investment over the long term. "Long term" is a key word there — for stock or other high-risk investments, you should aim to leave your money invested for at least five years, which should allow you to ride out any lows.
1. High-yield savings accounts
OK, a savings account isn't technically an investment, but rates continue to be high, even following the recent Federal Reserve rate cut. That's earned them a place on this list, especially for people who have a short-term goal or can't stomach the market volatility. Online savings accounts offer higher rates of return than traditional bank savings or checking accounts.
Best for: Savings accounts are best for short-term savings or money you need to access only occasionally (think of an emergency or vacation fund).
Where to open a high-yield savings account: At an online bank, which will typically pay higher rates than what you’ll get at traditional banks with physical branches.
Good to know: Some brokerage firms pay high rates on uninvested cash as well — rates that are similar to what you'd earn in a high-yield savings account. These are worth considering, especially if you plan to also invest in one of the options lower on this list and want to keep your money in one place. See our list of the best brokerage accounts for high interest rates.
Pros
Higher interest rate than traditional savings account.
Your money is FDIC-insured.
Can withdraw funds at any time.
Cons
Rates can fluctuate.
Often lower returns than some other investments.
2. Certificates of deposit
A certificate of deposit is a federally insured savings account that offers a fixed interest rate for a defined period of time. Now may be a good time to lock in that fixed rate — unlike a savings account, CD rates won't fluctuate if interest rates continue to go down.
Best for: A CD is for money you know you’ll need at a fixed date in the future (e.g., a home down payment or a wedding). Common term lengths are one, three and five years, so if you’re trying to safely grow your money for a specific purpose within a predetermined time frame, CDs could be a good option. It’s important to note, though, that to get your money out of a CD early, you’ll likely have to pay a fee. As with other investments, it’s a good rule of thumb not to buy a CD with money you might need soon.
Where to buy CDs: CDs are sold based on term length, and the best rates are generally found at online banks and credit unions.
Pros
Fixed interest rate not subject to market volatility.
Higher interest rate than traditional savings account.
Your money is FDIC-insured.
Cons
Can't withdraw money at any time without penalties.
Minimum deposit required.
Often lower returns than some other investments.
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3. Government bonds
Bonds can offer investors a relatively safe form of fixed income. A government bond is a loan to a government entity (such as the federal or municipal government) that pays investors interest over a set period of time, typically one to 30 years. Because of that steady stream of payments, bonds are known as fixed-income securities. Government bonds are virtually a risk-free investment, as they’re backed by the full faith and credit of the U.S. government.
The drawbacks? In exchange for that safety, you won’t see as high a return as you might with other investments. If you were to have a portfolio of 100% bonds (as opposed to a mix of stocks and bonds), it would be substantially harder to hit your retirement or long-term goals.
Best for: Conservative investors who would prefer to see less volatility in their portfolio. This is true despite some of the fluctuations government bonds have seen in 2025. Bonds' fixed income and lower volatility make them common with investors nearing or already in retirement, as these individuals may not have a long enough investment horizon to weather unexpected or severe market declines.
“Bonds offer a ballast to a portfolio, usually going up when stocks go down, which enables nervous investors to stay the course with their investment plan, and not panic sell,” says Delia Fernandez, a certified financial planner and founder of Fernandez Financial Advisory in Los Alamitos, California.
Where to buy government bonds: You can buy individual bonds or bond funds, which hold a variety of bonds to provide diversification, from a broker or directly from the underwriting investment bank or the U.S. government.
Pros
Fixed interest rate not subject to market volatility.
Backed by the U.S. government.
Interest exempt from state and local taxes.
Cons
Minimum deposit required.
Often lower returns than some other investments.
Small risk of principal loss.
4. Corporate bonds
Corporate bonds operate in the same way as government bonds; you’re only making a loan to a company, not a government. These loans are not backed by the government, making them a riskier option. And if it’s a high-yield bond (sometimes known as a junk bond), these can actually be substantially riskier, taking on a risk/return profile that more resembles stocks than bonds.
Best for: Investors looking for a fixed-income security with potentially higher yields than government bonds, and willing to take on a bit more risk in return. In corporate bonds, the higher the likelihood that the company will go out of business, the higher the yield. Conversely, bonds issued by large, stable companies will typically have a lower yield. It’s up to the investor to find the risk/return balance that works for them.
Where to buy corporate bonds: Similar to government bonds, you can buy corporate bond funds or individual bonds through an investment broker.
Pros
Fixed interest rate not subject to market volatility.
Can have higher yields than government bonds.
Can be lower risk than investing in stocks or funds.
Cons
Bonds with higher yields are riskier.
Not backed by the U.S. government.
Risk of principal loss.
5. Money market funds
Money market mutual funds are an investment product, not to be confused with money market accounts, which are bank deposit accounts similar to savings accounts. When you invest in a money market fund, your money buys a collection of high-quality, short-term government, bank or corporate debt.
Best for: Money you may need soon that you’re willing to expose to a little more market risk. Investors also use money market funds to hold a portion of their portfolio in a safer investment than stocks or as a holding pen for money earmarked for future investment. While money market funds are technically an investment, don’t expect the higher returns (and higher risk) of some other investments on this page. Money market fund growth is more akin to high-yield savings account yields.
Where to buy money market funds: Money market mutual funds can be purchased directly from a mutual fund provider or a bank, but the broadest selection will be available from an online discount brokerage.
Pros
Relatively low risk.
Some interest may be tax-exempt.
Can withdraw funds at any time.
Cons
Often lower returns than some other investments.
HYSAs and CDs are FDIC-insured and offer similar returns.
6. Mutual funds
A mutual fund pools cash from investors to buy stocks, bonds or other assets. Mutual funds offer investors an inexpensive way to diversify — spreading their money across multiple investments — to hedge against any single investment’s losses.
Best for: People saving for retirement or another long-term goal. Mutual funds are a convenient way to get exposure to the stock market’s superior investment returns without having to purchase and manage a portfolio of individual stocks. Some funds limit the scope of their investments to companies that fit certain criteria, such as technology companies in the biotech industry or corporations that pay high dividends. That allows you to focus on certain investing niches.
Where to buy mutual funds: Mutual funds are available directly from the companies that manage them, as well as through discount brokerage firms. Almost all of the mutual fund providers we review offer no-transaction-fee mutual funds (which means no commissions) as well as tools to help you pick funds. Be aware that mutual funds typically require a minimum initial investment of anywhere from $500 to thousands of dollars, although some providers will waive the minimum if you agree to set up automatic monthly investments.
Pros
Offers instant diversification.
Less volatile than investing in individual stocks.
Potential for strong returns.
Cons
Actively managed funds carry steeper fees.
Actively managed funds may not beat the market.
Often have high minimum investments.
» Need an investment account to get started? Learn how to open one
7. Index funds
An index fund is a type of mutual fund that holds the stocks in a particular market index (e.g., the S&P 500 or the Dow Jones Industrial Average). The aim is to provide investment returns equal to the underlying index’s performance, as opposed to an actively managed mutual fund that pays a professional to curate a fund’s holdings.
Best for: Those with long-term savings goals. They are more cost-effective due to lower fund management fees and are less volatile than actively managed funds that try to beat the market.
Index funds can be especially well-suited for young investors with a long timeline who can allocate more of their portfolio toward higher-returning stock funds than more conservative investments, such as bonds. Young investors who can emotionally weather the market’s ups and downs could even consider investing their entire portfolio in stock funds in the early stages, Fernandez says.
Where to buy index funds: Index funds are available directly from fund providers or through an online broker.
Pros
Offers instant diversification.
Potential for strong returns.
Low fees compared with actively managed funds.
Cons
Index funds aim to match the market — not beat it.
More risky than lower return investments.
8. Exchange-traded funds
Exchange-traded funds (ETFs) are like mutual funds in that they pool investor money to buy a collection of securities, providing a single diversified investment. The difference is how they are sold: Investors buy shares of ETFs just like they would buy shares of an individual stock.
Best for: Investors with a long time horizon. Beyond that, ETFs are ideal for investors who don’t have enough money to meet the minimum investment requirements for a mutual fund, because an ETF share price may be lower than a mutual fund minimum.
Where to buy ETFs: ETFs have ticker symbols like stocks and are available through brokerages. Robo-advisors also use ETFs to construct client portfolios.
Pros
Offers instant diversification.
Generally more tax-efficient than mutual or index funds.
Typically no investment minimum.
Typically very low expense ratios.
Cons
You may have to pay commission fees, though this is rare.
More volatile than fixed-income investments.
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9. Dividend stocks
Dividend stocks can provide the fixed income of bonds as well as the growth of individual stocks and stock funds. Dividends are regular cash payments that companies pay to shareholders and are often associated with stable, profitable companies. While share prices of some dividend stocks may not rise as high or quickly as growth-stage companies, they can be attractive to investors because of the dividends and stability they provide. Keep in mind: Dividends in taxable brokerage accounts are taxable in the year dividends occur. On the other hand, stocks (that do not pay dividends) are primarily taxed when the stock is sold.
Best for: Any investor, from first-timer to retiree, though specific types of dividend stocks may be better depending on where you are in your investing journey. Young investors, for example, may do well to look into dividend growers, which are companies with a strong track record of consecutively increasing their dividends. These companies may not have high yields currently, but if their dividend growth keeps up, they could in the future. Older investors looking for more stability or fixed income could consider stocks that pay consistent dividends. Taking the dividends as cash could be a part of a fixed-income investing plan.
Where to buy dividend stocks: Like others on this list, the easiest way to buy dividend stocks is through an online broker.
Pros
A source of fixed income.
Can offer short-term benefits (dividends) and long-term benefits (investment growth).
Cons
A high yield can sometimes mean high risk.
Taxes can be complicated.
10. Stocks
A stock represents a share of ownership in a company. Stocks generally offer a larger potential return on your investment than lower-risk investments, such as government bonds, but also may expose your money to higher levels of volatility.
Best for: Investors with a well-diversified portfolio who are willing to take on a little more risk. Due to the volatility of individual stocks, a good rule of thumb for investors is to limit their individual stock holdings to 10% or less of their overall portfolio.
Where to buy stocks: An easy way to buy stocks is through an online broker. Once you set up and fund a brokerage account, you’ll choose your order type and become a shareholder. (See our picks for the best brokerage for stock trading.)
Pros
Potential for strong returns.
Generally limited fees associated with trading and account management.
Cons
Considered a relatively high-risk investment.
Hand-picking stocks takes time and research.
Hard to achieve a well-diversified portfolio with stocks alone.
11. Gold
In case you haven't heard, gold is hot right now, as it tends to be when the stock market is volatile. Gold functions as a hedge against those fluctuations. But it's even hotter than most analysts would expect — gold's price has risen nearly 40% over the last year, and it has repeatedly hit record highs. Many gold stocks are having banner years as a result.
So, should you buy a bunch of gold bars and stash them in your basement? You could, but the easiest way to invest in gold is through more common financial instruments like the aforementioned ETFs, index funds or stocks. You can purchase these through an online brokerage account or even your retirement account and gain exposure to gold's soaring prices without having to store physical gold.
Best for: Investors looking to hedge against stock market volatility or to diversify a small portion of their portfolio. Like any other investment, gold shouldn't make up the bulk of a portfolio.
Where to buy gold: Some online brokers allow you to purchase physical gold, though fees can vary pretty widely and can be high. The most approachable option is gold stocks or gold funds.
Pros
Can help hedge against market volatility.
Accessible through funds and stocks.
Cons
Considered a relatively high-risk investment.
Does not offer diversification unless paired with other investments.
Physical gold may have steep fees and is not liquid.
Interest rate sensitivity of these investments
Like the stock market's natural fluctuations, interest rates will ebb and flow, too. While we don't recommend basing your investing strategy on whether things are up or down, it can be good to know what these changes mean for different savings vehicles or investments.
In NerdWallet's The Nerdy Investor newsletter, investing writer Sam Taube broke down how sensitive the first three investments on our list are to Fed rate cuts. Here's what he had to say.
High-yield savings accounts = fairly sensitive
Taube's take: "High-yield savings accounts generate their yield through bank loans, whose interest rates are tied to benchmarks such as the federal funds rate. That means high-yield savings account yields may decrease if and when the Fed cuts rates."
Certificates of deposit = not sensitive at all
Taube's take: "Traditional CDs lock up your money and pay a fixed yield until maturity, which can make them an appealing option for savers in an environment where interest rates are expected to decrease in the near future."
Treasury bonds = it depends
Taube's take: "The sensitivity of Treasury bonds depends on how you’re investing in them. An individual bond, if held to maturity, has a fixed yield, regardless of what happens to benchmark interest rates.
"But if you’re investing in bond ETFs or bond mutual funds, you’re likely investing in a pool of bonds with various maturity dates. A fund’s yield may fluctuate as the underlying bonds reach maturity and get rolled over into new bonds, which means that the fund’s yield may decrease if benchmark interest rates fall in the months ahead."
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