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Best Investments: Where to Invest in 2026

Wondering where to invest your money this year? High-yield savings accounts, CDs, bonds, funds and stocks are all considered among the best investments available. Learn more about the risks, potential returns and how to get started.

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Alieza Durana is a former investing writer at NerdWallet. She has over a decade of journalism experience covering housing, labor, gender and public policy issues for the Eviction Lab, The Fuller Project for International Reporting, New America and Slate. Her work has appeared in USA Today, The Washington Post, The Atlantic and Harvard Business Review. She is based in St. George, Utah.

When investing becomes a roller coaster ride — as it has been lately, with steep market reactions to current events — 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, especially during periods of volatility like right now? That answer is unsatisfying: It depends.

Someone close to retirement with a healthy nest egg will likely have a very different investment plan than someone just starting out in their career with no savings. Neither of these individuals should avoid investing; they should just choose the best investments for their individual circumstances and focus on their goals, which shouldn't change with every market whim.

Below are some of the best investments, roughly ordered from lowest risk to highest. In general, lower risk tends to mean lower potential returns, while taking on more risk may offer greater long-term growth.

10 best investments right now

High-yield savings accounts

Certificates of deposit

Government bonds

Corporate bonds

Money market funds

Mutual funds

Index funds

Exchange-traded funds

Dividend stocks

Stocks

1. High-yield savings accounts

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: Short-term savings or money you need to access only occasionally (think of an emergency or vacation fund).

Where to open: 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.

» Next Step: See the best high-yield savings accounts

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 are sold based on term length, and the best rates are generally found at online banks and credit unions.

» Next Step: See the best CD rates right now.

Brokerage firms

on Charles Schwab's website

on E*TRADE's website

on Vanguard's website

on Fidelity's website

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. “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.

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 previous years. 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.

Where to buy: 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.

» Next Step: Learn more about how to invest in bonds

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: Similar to government bonds, you can buy corporate bond funds or individual bonds through an investment broker.

» Next Step: See the best brokers for bonds

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 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.

» Next Step: See the best-performing money market funds

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 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.

» 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 are available directly from fund providers or through an online broker.

» Next Step: See the best-performing index funds

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 have ticker symbols like stocks and are available through brokerages. Robo-advisors also use ETFs to construct client portfolios.

» Next step: See our roundup of the best brokers for ETF investing

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: Like others on this list, the easiest way to buy dividend stocks is through an online broker.

» Next Step: Learn more about how to invest in dividend stocks

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: 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.

» Next Step: See the best-performing stocks

Popular right now: Energy stocks

It’s been a significant month for the energy sector as the ongoing war in the Middle East continues to impact global oil supply.

While day traders and futures traders may be tempted to get in on the surge, in a recent edition of The Nerdy Investor newsletter, lead investing writer Sam Taube says that it's not a wise strategy for most investors.

"For investors with long time horizons, such as those building a retirement nest-egg, trading the recent volatility is unlikely to pay off," he writes. "Investing experts tend to recommend staying the course instead, and making consistent contributions to buy-and-hold investments like index funds throughout periods of volatility."

Frequently asked questions

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 on what you can expect from popular investments.

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.

Helpful resources