Forget CDs: Here Are 3 Investments With Higher Growth

Let's be honest -- locking your money in a certificate of deposit (CD) can feel like watching paint dry. Sure, it's safe. But even today's 4.00+ APYs are too sluggish to truly grow long-term wealth.

If you're aiming for higher growth, there are smarter places to park your cash. Below are three investment options that can potentially outpace CDs, without swinging for the fences on risk.

Oh, and quick tip: One of the best "investments" isn't an investment at all… It's paying off debt. If you're carrying loans -- even low-interest ones in the 4%-5% range -- paying them off can give you a guaranteed return equal to the interest rate. That's tough to beat.

1. Index funds

If you want to grow your money steadily over time, index funds are a proven winner. These funds track major stock market indexes like the S&P 500, which has historically delivered around a 10% average annual return.

Here's why index funds are a step up from CDs:

• Diversification: You're spreading your money across hundreds of companies, reducing risk.
• Low fees: Most index funds charge minimal management fees. For example, the Vanguard S&P 500 ETF (VOO) has an expense ratio of just 0.03%.
• Liquidity: Unlike CDs, your money isn't locked up -- you can sell whenever you need.

While the stock market has ups and downs, a long-term approach can smooth out the bumps. It's a "set-it-and-forget-it" strategy that's best for those with a decade or longer investment horizon.

2. Fixed deferred annuities

Fixed deferred annuities are like a turbocharged version of a CD. You hand over your money to an insurance company, and they guarantee a fixed interest rate for a set period of time.

In today's market, fixed annuities can offer rates in the 5%-6% range, depending on the term length and issuer. That's higher than most CDs right now.

While annuities don't come with FDIC insurance like CDs, they are backed by the financial strength of the issuing insurance company. That's why it's really important to choose a reputable provider with solid ratings.

Another important note: Your money is typically "locked in" for several years with an annuity, and early withdrawals can trigger surrender charges. Always read the fine print and understand the terms before committing.

3. Rental properties

This used to be my main wealth-building strategy when I was younger. I loved rental properties because they paid me both rental cash flow each month as well as long-term property appreciation.

The return on investment for a rental property depends on many factors. Here's how real estate can outperform CDs in the long run:

• Monthly cash flow: Tenants' rent payments can provide steady income, especially if you own the property outright and have low expenses.
• Property appreciation: Real estate values tend to rise over time, although it varies from location to location.
• Leverage: You can use a mortgage to buy a larger property with a smaller upfront investment.
• Potential tax perks: You can deduct expenses like mortgage interest, property taxes, and depreciation.

Of course, being a landlord isn't for everyone. Personally, I lost my passion for real estate through the years and began selling my rentals to simplify my life.

But if you're up for it, real estate can be a powerful wealth-building tool. Just make sure you're up for handling ongoing responsibilities like maintenance and tenant management.

Don't overlook high-yield savings accounts

High-yield savings accounts (HYSAs) are one of the easiest ways to earn a near 4% return on your cash -- without locking it up.

Unlike CDs, HYSAs let you deposit or withdraw anytime, with no penalties. That makes them ideal for short-term goals like building an emergency fund or saving for a big purchase.

So if you don't have a long-term investment horizon and want your money to stay safe, liquid, and still earn a solid return, an HYSA is a great spot.

Check out our list of the best high-yield savings accounts and start earning more interest today.