10 Safe Investments With High Returns in Canada 2022: Invest with Low Risk

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Are you looking for a safe place to invest your money? If so, you’re in luck! Canada is home to a number of investment opportunities that offer high returns with minimal risk.

Whether you’re just getting started or you’re looking for something new, it may be hard to find a safe investment that can give you high returns at the same time. Fortunately, there are a few safe investments with high returns in Canada that have proven effective for years.

In this blog post, we have compiled a list of the safest and most profitable investments available, so you can be sure that your money is working hard for you. You will also learn about what to look for when choosing the one that suits your needs. 

So whether you’re looking for short-term or long-term investments, you’ll find one of the options below perfect for your needs!


What are Safe Investments With High Returns?

When it comes to investing, there are two main goals: safety and returns. And while you may think that these objectives are mutually exclusive, it is possible to find investments that offer both.

Safe investments are those that protect your capital from losses, while high-return investments generate a higher than average rate of return.

That means a safe investment with high returns is any investment that has the potential to generate a higher return than what you would typically earn on a low-risk investment, like a government bond, while also limiting your downside risk.

These safe investments have a low-risk level and guarantee high returns. They are often used by investors to ensure stability and long-term growth.

Such investments are often found in low-risk investments such as GICs and high-interest savings accounts. You may also find them in certain equities or through a diversified stock portfolio like the one offered by ETFs and mutual funds.

Of course, there is no such thing as a guaranteed safe investment. But by diversifying your portfolio and investing in assets that have historically performed well, you can minimize your risk while still giving yourself the chance to earn.


Safe Investments with High Returns in Canada

So, what are some safe investments with high returns in Canada? Below, we’ll cover a few investments that minimizes risk while providing an above average return.

Each one comes with its unique set of benefits and risks. Here are just a few of the best options for safe investments in Canada:

1. Guaranteed Investment Certificates (GIC)

Guaranteed Investment Certificates (GICs) are one of the safest investment options available to Canadians. They are low-risk and offer guaranteed returns, making them an ideal choice for conservative investors.

When you invest in GICs, your funds are tied up for a term – typically have a term of one to five years, but can be as long as 10 years. And the longer the term, the higher the interest rate.

You can hold a GIC in registered or non-registered accounts. Some of the GICs you can invest in include: RRSP, TFSA, RRIF and RESP.

Some people use GICs as a way to save for retirement, a big purchase, or even just a rainy day fund. GICs are also a popular choice for people who want to invest but don’t want to take on the risk of stocks or other investments. No matter what your goals are, GICs are a great way to grow your money over time.

However, when choosing a GIC, it’s important to compare the different options available in terms of interest rate and term length to make sure you are getting the best return on your investment.

GICs are one of the safest investment options in Canada because they are covered by CDIC deposit protection or a provincial deposit insurer depending on the financial institutions.

Check for the best GIC rates in Canada in the linked post or sign-up to Qtrade to compare and buy GICs from several of the top GIC providers in Canada.

2. High-Interest Savings Account

A high-interest savings account is a great way to earn more on your savings without taking on any extra risk. 

The interest rate on a HISA is much higher than the rate on a standard savings account, which means your money will grow at a faster pace. For example, EQ Bank offers a HISA known as a “Savings Plus Account” with a 2.50% interest rate.

Also, a HISA is a great way to save for short-term goals, like a vacation or a new car. This means you can earn more while still having access to your cash when you need it. 

In addition, most HISAs are CDIC insured for up to $100,000, so you can rest assured your money is safe. So if you’re looking for a safe investment with high returns, a high-interest savings account might be the perfect solution for you.

However, there are many different HISAs available, so be sure to compare options and find one that best suits your needs.

Related: Best High Interest Savings Account

3. Money Market Accounts

Money markets are short-term investments with maturities of one year or less. This makes them an attractive option for investors who need to save or invest their cash for a short period.

The securities in a money market fund portfolio typically include Treasury bills, certificates of deposit and commercial papers.

These accounts typically require a higher minimum balance than other types of deposit accounts but offer greater flexibility in terms of withdrawals and transfers. 

Also, these accounts are designed to provide stability and liquidity to the banking system and offer higher interest rates than other types of deposit accounts.

You can benefit from these higher interest rates, but you should be aware of the risks associated with these accounts. Unlike GICs and HISAs, they’re not entirely risk-free and are subject to some volatility.

Therefore, it is essential to carefully review the terms and conditions of each account before investing any funds.

Also, you should note that money market funds are investments that are not CDIC insured and are subject to market conditions. 

4. Corporate Bonds

A corporate bond is a type of debt security that is issued by a firm and sold to investors. 

The company sells debt security to investors and in return receives capital that can be used to finance its operations or expand the business.

The investor is then paid a series of interest payments, which can be either fixed or variable until the bond reaches maturity. At that point, the payments cease and the original investment is returned. 

Corporate bonds can be an attractive option for businesses because they provide a predictable source of capital at a relatively low cost. 

And for investors, they offer the potential for regular income and the possibility of earning a higher return than what is available from more traditional investments such as savings accounts or other types of bonds.

So if you’re looking for a safe and reliable way to earn some extra income, investing in corporate bonds may be the right choice for you.

5. Certificates of Deposit

A certificate of deposit, or CD, is a type of savings account that allows you to earn interest on your deposited funds. 

CDs typically have a fixed term, meaning that you agree to leave your money in the account for a set period, such as six months, or a year. 

In return, the bank pays you interest on your deposited funds. When you withdraw your CD, you receive your initial invested amount plus any interest that has accrued. 

CDs are a popular choice for investors who are looking for a safe and relatively low-risk way to grow their money. 

While the interest rate on a CD is usually lower than what you would earn from investing in stocks, it is also much less likely that you will lose money. 

Nevertheless, if you’re considering investing in a CD, be sure to compare terms and interest rates from different issuers to find the account that best meets your needs.

6.  Annuities

Annuities are long-term investments that can help provide financial security in retirement. 

They are purchased through an insurance company, and the lump sum you paid (your purchase payments) is transformed into periodic payments that last for as long as you live. 

One benefit of annuities is that they offer interest rates that are higher than what is typically available from other investments. 

This higher interest rate can help to offset the effects of inflation and make sure that your money keeps pace with the rising cost of living. 

Another benefit is that annuities provide a guaranteed income stream that can help to cover essential expenses in retirement. This guaranteed income can give you peace of mind knowing that you will not outlive your savings. 

Additionally, annuities offer tax-deferred growth, meaning that the interest you earn on your investment grows tax-free until you start taking withdrawals. For these reasons, annuities can be a valuable addition to your retirement planning.

While annuities come with some benefits, there are also some drawbacks to consider. One downside is that once you purchase an annuity, you usually cannot access your money until retirement.

This means that if you experience financial hardship before retirement, you may not be able to tap into your annuity to meet your needs. 

Also, annuities are only available to retirees, so if you are young, you’ll need to start saving now if you want to purchase one later. 

7. Index Funds

Index funds have become increasingly popular in recent years, as they offer a low-cost way to invest in the stock market. 

They are a type of investment vehicle that tracks the return of a particular market index. Unlike other types of investments, index funds are not actively managed. 

This means that instead of actively selecting stocks or bonds for purchase or sale, the fund simply tracks the securities that are weighted in the index. 

This hands-off approach helps to keep costs low, and it can also lead to smoother returns over time. 

In general, index funds have lower fees than actively-managed funds, and they are often seen as a more efficient way to invest. 

Also, some investors are drawn to index funds because they provide a simple and effective way to track the performance of a broad market index. 

While index funds do not guarantee returns, they have been shown to outperform actively-managed funds over the long term. For these reasons, index funds can be an attractive option for investors.

8. Dividend-Paying Stocks

Dividend-paying stocks have long been a popular investment, thanks to their ability to provide a steady stream of income. 

Dividends are a way for companies to share their profits with shareholders, and they are typically distributed quarterly. 

Unlike other stocks, dividend-paying stocks provide a regular payout regardless of the stock’s performance. This can be a valuable source of income for investors, especially in times of market volatility. 

In addition to providing a regular source of income, dividends can also help to hedge against stock price volatility. 

While the size of the dividend is certainly important, it’s also worth considering the company’s dividend history. A company that has regularly increased its dividend is likely to continue doing so in the future, providing investors with a potential source of growth. 

9. Low-Volatility Fund

Low-volatility funds are the type of investment that invests in securities that have lower levels of volatility, or price fluctuation. 

Low-volatility funds tend to outperform in periods of market turmoil, as they are designed to minimize losses while still providing some exposure to the potential upside. 

For this reason, low-volatility funds can be an attractive option for investors who are looking for downside protection while still being able to participate in the upside of the market.

While there is no guaranteed way to avoid losses in any investment, a low-volatility fund can help to reduce the overall risk of your portfolio.

However, low-volatility funds typically have higher expense ratios than other mutual funds, so it’s important to consider all fees before investing. 

Overall, low-volatility funds can be a good choice for investors who want to reduce their risk while still earning a return on their investment.

10. Dividend ETFs

Exchange-traded funds have become increasingly popular in recent years, as they offer a convenient way to invest in a variety of assets.

One type of ETFs that have gained popularity are dividend ETFs. These funds invest in assets that offer high interest and distribute returns on a monthly, quarterly, or annual basis. 

The funds typically invest in companies with a strong history of paying dividends. As a result, dividend ETFs tend to be less volatile than other types of ETFs.

Additionally, dividend ETFs can help to diversify your portfolio and reduce your overall risk.

And because the fund pays out dividends on a regular basis, it can provide investors with a steady stream of income.

While these funds come with some risks, they can be a helpful tool for those who are looking to generate extra income.

Learn more: Best Dividend ETFs in Canada


How to Choose a Safe Investment With High Returns in Canada

When it comes time to invest your hard-earned money, you want to be sure that you are choosing the best possible option. 

With so many different investment options available, it can be difficult to know where to begin. 

Nevertheless, by considering a few key factors, it is possible to make informed decisions that stand a good chance of yielding positive results. Here are a few things you should keep in mind:

1. Know Your Budget

The first step in choosing a safe investment with high returns is knowing your budget. Take a close look at your financial condition and determine your budget.

How much can you afford to lose? How much are you willing to invest? These are critical questions that will help guide your decision. 

Once you have a good understanding of your budget, you can start to look at the different investment options we have covered above and compare their potential returns. 

Doing this will help you choose a safe investment with high returns that fits well within your budget.

2. Investment Goal

While it can be tempting to go for the highest return possible, it’s important to first consider what your investment goals are. 

After all, you don’t want to end up taking too much risk and losing money when what you’re really looking for is stability. 

Are you looking to simply preserve your capital, or are you willing to take on more risk in pursuit of higher returns? 

Once you have answered this question, you can begin to assess different investment products in terms of their potential risks and rewards. 

3. Risk Tolerance

Next, you need to assess your risk tolerance. How much risk are you willing to take on in exchange for the potential of higher returns? 

Your age, current financial situation, and investment goals will all play a role in how much risk you’re comfortable taking on. 

For example, if you’re young and have a long time to invest, you may be more comfortable with a higher-risk investment that has the potential for higher returns. However, if you’re nearing retirement, you may want to focus on preserving your capital and choose a safe investment with lower returns. 

Ultimately, the best investment for you is one that you are comfortable holding.

4. Historical Performance

Another important factor to consider when choosing a safe investment is the investment’s historical performance. Past performance is not a guarantee of future results, but it can give you an idea of how an investment has performed in different market conditions.

5. Diversification

One of the best ways to reduce risk is to diversify your portfolio. By investing in a variety of assets, you can minimize your losses if one investment fails. With low-risk investments, there is a lower potential for losses, but diversification can still help you balance out your portfolio.


Summary

There are many safe investments with high returns available in Canada. Whether you’re worried about a recession or just want to keep your funds safe for a short term goal, you’ll find one of the best investments covered above suitable.

By diversifying your portfolio and investing in assets that have a history of strong performance, you can minimize your risk while still earning a healthy return on your investment.

Hopefully, this article has helped you make an informed decision about your financial future. 

Remember to do your research by comparing several investment options before making any investment decisions and consult with a financial advisor if needed.

We wish you all the best on your journey to wealth. Do you have any questions? Let us know in the comments below.

Simon is a CPA by day and a Personal Finance Blogger by night. With over a decade experience in financial services, he's passionate about personal finance, investing and helping people take control of their financial life.

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