10 best investments for 2025

Top investments right now

Investing can provide you with another source of income, fund your retirement or even get you out of a financial jam. Above all, investing can generate good returns on your money — helping you meet your financial goals and increase your wealth over time. Or maybe you’ve recently sold your home or come into some money. It’s a wise decision to let that money work for you.

While investing can generate high returns, you’ll also want to balance potential gains with the risk involved. And you’ll want to be in a financial position to do so, meaning you’ll need manageable debt levels, have an adequate emergency fund and be able to ride out the ups and downs of the market without needing to access your money.

There are many ways to invest — from safe choices such as high-yield savings accounts and CDs to medium-risk options such as corporate bonds, and even higher-risk picks such as stock index funds. That’s great news because it means you can find investments that offer a variety of returns and fit your risk profile. It also means that you can combine investments to create a well-rounded and diversified — that is, safer — portfolio.

So, what are the best investments for 2025? Bankrate's list starts with some safer investment ideas and then moves on to those that should deliver higher returns but may be more volatile, giving you a healthy mix of growth and safety during what looks like a tough-to-predict and volatile market environment.

Overview: A high-yield online savings account pays you interest on your cash balance. And just like a savings account at your brick-and-mortar bank, high-yield online savings accounts are accessible vehicles for your cash.

Who are they best for? A savings account is a good vehicle for those who need to access cash in the near future. A high-yield savings account also works well for risk-averse investors who want to avoid the risk that they won’t get their money back.

Risks

Many of the banks that offer these accounts are FDIC-insured, so you won’t have to worry about losing your deposits as long as you stay within federal insurance limits.

While high-yield savings accounts are considered safe investments, like CDs, you do run the risk of losing purchasing power over time due to inflation, if rates are too low.

Rewards

With fewer overhead costs, you can typically earn much higher interest rates at online banks than you would at a traditional brick-and-mortar bank. Plus, you’ll likely have easy access to the money by quickly transferring it to your primary bank or maybe even via an ATM.

Rates may run above inflation for much of the year, so you may gain purchasing power, too.

Where to get them

You can browse Bankrate’s list of best high-yield savings accounts for a top rate. Otherwise, you can turn to your local bank or credit union, though you may not get the best rate.

Overview: A CD ladder is a series of certificates of deposit at staggered maturities. For example, you could open five CDs that are staggered across five years, with one CD maturing each year. A CD ladder ensures that you have a short-term CD maturing soon, providing you liquidity, and reduces your reinvestment risk, the risk that you can’t reinvest at attractive rates in the future. A CD ladder can be an attractive investment when you’re not sure which way interest rates may move in the future, so you’re effectively diversifying your risk.

Who are they best for? A CD ladder can be an attractive strategy for risk-averse investors who are looking to generate consistent income. It’s an alternative to investing in bonds, which may offer similar yields, but CDs are not exposed to market risk, so their value does not fluctuate over time.

Risks

CDs are considered safe investments and CD ladders reduce one of their key risks: reinvestment risk. Reinvestment risk occurs when interest rates fall and investors earn less when they reinvest principal and interest in new CDs with lower rates, as we saw in 2020 and 2021. The opposite risk is that rates will rise and investors won’t be able to take advantage because they’ve already locked their money into a CD. A CD ladder basically splits the difference here.

Rewards

A CD ladder ensures that money is always coming in and it’s a reliable cash payment that’s backed by FDIC insurance. Once a CD matures, you get your original principal back plus any accrued interest, and you can spend it or reinvest the money at the top of the ladder.

Where to get them

Bankrate’s list of best CD rates will help you find the best rate across the nation, instead of having to rely on what’s available only in your local area. And keep in mind that you don’t have to set up your ladder at one bank. Go with the bank that offers the best rate for the CD term you need – another great reason to review Bankrate’s list of the best CD rates.

Overview: Short-term Treasury ETFs hold Treasury bills, which expire in less than a year, and the funds pay a safe return that will fluctuate with the fed funds rate. These funds will slowly increase in value during the month, and then will pay out the accumulated interest at the end of the month.

Who are they best for? Short-term Treasury ETFs are a solid choice for investors who need ready access to cash, since these funds can be sold any day the market is open. If rates fluctuate, the payout on these funds will also fluctuate. So these funds can be a good safe haven for investors and their holdings are backed by the U.S. government.

Risks

These funds are low risk, and perhaps the biggest risk is that the interest rate falls if the Federal Reserve lowers short-term interest rates. Treasury funds are a great safe haven if the market gets rocky, and you can use them to hold cash until it’s time to invest in stocks or other investments.

Rewards

Investors get a safe, guaranteed return with a highly liquid investment that pays out monthly. While rates are off their peak levels of early 2024, they’re still relatively attractive compared to the earlier low-rate environment.

Where to get them

Short-term Treasury ETFs are available at any brokerage, and you can typically trade them for no commission.

Overview: Corporations sometimes raise money by issuing bonds to investors, and these can be packaged into bond funds that own bonds issued by potentially hundreds of corporations.

Medium-term bonds have an average maturity of three to eight years or so, making them a better choice when interest rates are falling, as they did over the past few years and may continue to do so in the future.

Who are they best for? Corporate bond funds can be an excellent choice for investors looking for cash flow, such as retirees, or those who want to reduce their overall portfolio risk but still earn a return. Medium-term corporate bond funds can be good for risk-averse investors who want more yield than government bond funds.

Risks

As is the case with other bond funds, medium-term corporate bond funds are not FDIC-insured.

There is always the chance that companies will have their credit rating downgraded or run into financial trouble and default on the bonds. To reduce that risk, make sure your fund is made up of high-quality corporate bonds. However, bond funds usually own bonds from many different companies, reducing the risk of any one bond hurting your portfolio much.

Rewards

Investment-grade medium-term bond funds often reward investors with higher returns than government and municipal bond funds. But the greater rewards come with some added risk.

Where to get them

You can buy and sell corporate bond funds with any broker that allows you to trade ETFs or mutual funds.

Most brokers allow you to trade ETFs for no commission, whereas many brokers may require a commission or a minimum purchase to buy a mutual fund.

Overview: Dividends are portions of a company’s profit that are paid out to shareholders, usually on a quarterly basis. So, dividend stocks are those stocks that offer a cash payout — and not all stocks do — while a fund packages up only dividend stocks into one easy-to-buy unit.

Who are they best for? Buying individual stocks, whether they pay dividends or not, is better suited for intermediate and advanced investors. But you can buy a group of them in a stock fund and reduce your risk. Dividend stock funds are a good selection for almost any kind of stock investor but can be better for those who are looking for income. Those who need income and can stay invested for longer periods may find these attractive.

Risks

As with any stock investments, dividend stocks come with risk. They’re considered safer than growth stocks or other non-dividend stocks, but you should choose your portfolio carefully.

Make sure you invest in companies with a solid history of dividend increases rather than selecting those with the highest current yield. That could be a sign of upcoming trouble. However, even well-regarded companies can be hit by a crisis, so a good reputation is not a protection against the company slashing its dividend or eliminating it entirely.

However, you eliminate many of these risks by buying a dividend stock fund with a diversified collection of assets, reducing your reliance on any single company.

Rewards

Even your stock market investments can become a little safer with stocks that pay dividends.

With a dividend stock, not only can you gain on your investment through long-term market appreciation, but you’ll also earn cash in the short term.

Where to get them

Dividend stock funds are available as either ETFs or mutual funds at any broker that deals in them. ETFs may be more advantageous because they often have no minimum purchase amount and are typically commission-free.

In contrast, mutual funds may require a minimum purchase and your broker may charge a commission for them, depending on the broker.

Overview: These funds invest in small-cap stocks, which are the stocks of relatively small companies. Small caps often have strong growth prospects, and many of the market’s largest companies were once small caps, so the potential gains can be significant. A small-cap fund packages dozens or even hundreds of small caps into a single, easy-to-buy unit.

Who are they best for? Small-cap funds are appropriate for investors looking for attractive long-term returns and who are able to stay invested in them for at least three to five years, riding out volatility along the way. Because these funds are comprised of stocks, they’ll fluctuate much more than safer kinds of investments.

Risks

Small-cap stocks tend to be riskier than large caps. The smaller companies are less established, have fewer financial resources and are generally less stable than the economy’s largest companies. But a diversified small-cap fund helps even out some of these risks by putting many different eggs in your small-cap basket.

Rewards

Small-cap stock funds can earn sizable returns over time, and the best small-cap ETFs can earn double-digit returns annually for years.

With interest rates having peaked last year, growth stocks such as small caps may be poised for a strong performance in 2025.

Where to get them

You can buy small-cap funds as either an ETF or mutual fund, and they’re available at any broker offering these two types of funds. Typically, ETFs are commission-free, while you may have to pay a transaction fee for mutual funds.

Overview: A real estate investment trust, or REIT, is one of the most attractive ways to invest in real estate. REITs pay out dividends in exchange for not being taxed at the corporate level, and REIT index funds pass those dividends along to investors. Publicly traded REIT funds can include dozens of stocks and allow you to buy into many sub-sectors (lodging, apartments, office and many more) in a single fund. They’re a good way for investors to get diversified exposure to real estate without worrying about the headaches of managing the property. After some hard years for REITs amid rising rates, they have performed better recently.

Who are they best for? REIT index funds pay out substantial dividends, making them an attractive place for income-focused investors, such as retirees. But REITs also tend to grow over time, so there’s some potential for capital appreciation, too. Prices of publicly traded REITs can fluctuate markedly, so investors need to take a long-term focus and be willing to deal with the volatility.

Risks

Owning a REIT index fund can take a lot of the risk out of owning individual REITs, because the fund offers diversification, allowing you to own many REITs inside a single fund. But the fund price will fluctuate, especially as interest rates rise. Watch out for REITs or REIT funds that aren’t publicly traded, however.

Rewards

Investors can win in two ways, with a growing stream of dividends and capital appreciation. Over time, a good REIT fund could earn 10 to 12 percent annual returns, with a chunk of that as cash dividends.

Where to get them

You can purchase a REIT fund at any broker that allows you to trade ETFs or mutual funds. ETFs are typically commission-free, while mutual funds may charge a commission and require you to make a minimum purchase.

Overview: An S&P 500 index fund is based on about five hundred of the largest American companies, meaning it comprises many of the most successful companies in the world. For example, Amazon and Berkshire Hathaway are two of the most prominent member companies in the index.

Who are they best for? If you want to achieve higher returns than more traditional banking products or bonds, a good alternative is an S&P 500 index fund, though it does come with more volatility. An S&P 500 index fund is an excellent choice for beginning investors because it provides broad, diversified exposure to the stock market. An S&P 500 index fund is a good choice for any stock investor looking for a diversified investment and who can stay invested for at least three to five years.

Risks

An S&P 500 fund is one of the less-risky ways to invest in stocks, because it’s made up of the market’s top companies and is highly diversified. Of course, it still includes stocks, so it’s going to be more volatile than bonds or any bank products.

It’s also not insured by the government, so you can lose money based on fluctuations in value. However, the index has done quite well over time.

The index rallied furiously after its pandemic-driven plunge in March 2020, but performed poorly in 2022 and then rebounded in 2023 and 2024, so investors should stick to their long-term investment plan if they invest here.

Rewards

Like nearly any fund, an S&P 500 index fund offers immediate diversification, allowing you to own a piece of all of those companies. The fund includes companies from every industry, making it more resilient than many investments.

Over time, the index has returned about 10 percent annually. These funds can be purchased with very low expense ratios (how much the management company charges to run the fund) and they’re some of the best index funds.

Where to get them

You can purchase an S&P 500 index fund at any broker that allows you to trade ETFs or mutual funds. ETFs are typically commission-free, so you won’t pay any extra charge, whereas mutual funds may charge a commission and require you to make a minimum purchase.

Overview: An index fund based on the Nasdaq-100 is a great choice for investors who want to have exposure to some of the biggest and best tech companies without having to pick the winners and losers or having to analyze specific companies.

The fund is based on the Nasdaq’s 100 largest companies, meaning they’re among the most successful and stable. Such companies include Apple and Alphabet, each of which comprises a large portion of the total index. Microsoft is another prominent member company.

Who are they best for? A Nasdaq-100 index fund is a solid selection for stock investors looking for growth and willing to deal with significant volatility. Investors should be able to commit to holding it for at least three to five years. Using dollar-cost averaging to buy into an index fund can help reduce your risk, compared to buying in with a lump sum.

Risks

Like any publicly traded stock, this collection of stocks can move down, too. While the Nasdaq-100 has some of the strongest tech companies, these companies are also usually some of the most highly valued.

That high valuation means that they’re likely prone to falling quickly in a downturn, though they may rise quickly during an economic recovery.

Rewards

A Nasdaq-100 index fund offers you immediate diversification, so that your portfolio is not exposed to the failure of any single company.

The best Nasdaq index funds charge a low expense ratio, and they’re a cheap way to own all the companies in the index.

Where to get them

Nasdaq-100 index funds are available as both ETFs and mutual funds. Most brokers allow you to trade ETFs without a commission, while mutual funds may charge a commission and have a minimum purchase amount.

Overview: Bitcoin ETFs own the world’s largest cryptocurrency and make it easy to purchase on the stock exchange. The funds’ returns mirror those of the cryptocurrency minus the fund’s expense ratio, which in many cases is quite low.

Who are they best for? Bitcoin is a risky investment that has performed very well over time, though not without severe volatility along the way. So, investors need iron-clad stomachs to handle the volatility here. But it’s much safer and easier to invest as part of an ETF than through cryptocurrency exchanges.

Risks

The ETF structure actually reduces the risk of investing in Bitcoin by dealing with one of the major issues: safely storing it. That job is up to the fund companies. But Bitcoin is worth only what the next trader will pay for it. It’s not backed by anything at all, as a stock or bond is. So Bitcoin is completely dependent on the positive sentiment of traders.

Rewards

The potential return here may be significant. The Trump administration is perceived to be crypto-friendly and may make it easier for cryptocurrency to be integrated into financial markets.

Where to get them

Bitcoin ETFs are available at any brokerage — and you can typically trade them for no commission, though the funds will charge an expense ratio based on the size of your investment in the fund.

Key things to consider before you start investing

As you’re deciding what to invest in, you’ll want to consider several factors, including your risk tolerance, time horizon, your knowledge of investing, your financial situation and how much you can invest.

If you’re looking to grow your wealth, you can opt for lower-risk investments that pay a modest return, or you can take on more risk and aim for a higher return. There’s typically a trade-off in investing between risk and return. Or you can take a balanced approach, having absolutely safe money investments while still giving yourself the opportunity for long-term growth.

The best investments for 2025 allow you to do both, with varying levels of risk and return.

1. Risk tolerance

Risk tolerance means how much you can withstand when it comes to fluctuations in the value of your investments. Are you willing to take big risks to potentially get big returns? Or do you need a more conservative portfolio? Risk tolerance can be psychological as well as simply what your personal financial situation requires.

Conservative investors or those nearing retirement may be more comfortable allocating a larger percentage of their portfolios to less-risky investments. These are also great for people saving for both short- and intermediate-term goals. If the market becomes volatile, investments in CDs and other FDIC-protected accounts won’t lose value and will be there when you need them.

Those with stronger stomachs, workers still accumulating a retirement nest egg and those with a decade or more until they need the money are likely to fare better with riskier portfolios, as long as they diversify. A longer time horizon allows you to ride out the volatility of stocks and take advantage of their potentially higher return, for example.

2. Time horizon

Time horizon simply means when you need the money. Do you need the money tomorrow or in 30 years? Are you saving for a house down payment in three years or are you looking to use your money in retirement? Time horizon determines what kinds of investments are more appropriate.

If you have a shorter time horizon, you need the money to be in the account at a specific point in time and not tied up. And that means you need safer investments such as savings accounts, CDs or maybe bonds. These fluctuate less and are generally safer.

If you have a longer time horizon, you can afford to take some risks with higher-return but more volatile investments. Your time horizon allows you to ride out the ups and downs of the market, hopefully on the way to greater long-term returns. With a longer time horizon, you can invest in stocks and stock funds and then be able to hold them for at least three to five years.

It’s important that your investments are calibrated to your time horizon. You don’t want to put next month’s rent money in the stock market and hope it’s there when you need it.

3. Your knowledge

Your knowledge of investing plays a key role in what you’re investing in. Investments such as savings accounts and CDs require little knowledge, especially since your account is protected by the FDIC. But market-based products such as stocks and bonds require more knowledge.

If you want to invest in assets that require more knowledge, you’ll have to develop your understanding of them. For example, if you want to invest in individual stocks, you need a great deal of knowledge about the company, the industry, the products, the competitive landscape, the company’s finances and much more. Many people don’t have the time to invest in this process.

However, there are ways to take advantage of the market even if you have less knowledge. One of the best is an index fund, which includes a collection of stocks. If any single stock performs poorly, it’s likely not going to affect the index much. In effect, you’re investing in the performance of dozens, if not hundreds, of stocks, which is more a wager on the market’s overall performance.

So you’ll want to understand the limits of your knowledge as you think about investments. (Here’s how to research stocks like the pros.)

4. How much you can afford to invest

How much can you bring to an investment? The more money you can invest, the more likely it’s going to be worthwhile to investigate higher-risk, higher-return investments.

If you can bring more money, it can be worthwhile to make the time investment required to understand a specific stock or industry, because the potential rewards are so much greater than with bank products such as CDs.

Otherwise, it may simply not be worth your time. So, you may stick with bank products or turn to ETFs or mutual funds that require less time investment. These products can also work well for those who want to add to the account incrementally, as 401(k) participants do.

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.