3 Smart, Risk-Free Places to Invest Your Money in 2023

Not all investments are exciting, and that's a good thing. 

Investing money doesn't always mean taking risks. There are places where money can grow without losing any of it in the process. The growth generated may not be as fast or dramatic, but you're guaranteed not to suffer any losses. Here are three things you can do with your money in 2023, each designed to round out a healthy portfolio.

1. Certificate of deposit

They may not be sexy, but certificates of deposit (CDs) are dependable -- a tried-and-true place to store money you're not going to need right away.

What is a CD?

A CD is a type of savings account that holds a set amount of money for a set period of time, such as six months, one year, or five years. In exchange for you allowing it to hold your money, the bank pays you interest. When you redeem the CD, you receive your original investment plus interest earned.

A CD purchased through a federally insured bank is insured for up to $250,000.

What you'll need to know upfront

Before you hand over any money, you'll need to read the disclosure statement provided by your financial institution. Here's what that disclosure statement will tell you:

• Interest rate you'll be paid
• Whether the interest rate is fixed or variable
• How often interest is paid
• Maturity date
• Penalties for early withdrawal

Two advantages and two disadvantages:

Advantage No. 1: Secure

Advantage No. 2: Easy to open

Disadvantage No. 1: Low interest rate. While CDs typically pay a higher rate than other insured accounts, the rate paid may not be enough to keep up with inflation.

Disadvantage No. 2: Putting too much money in a CD may result in missing out on other, albeit riskier, investments.

2. Money market account

A money market account (MMA) is another type of savings account. Although it's not always the case, an MMA typically pays a higher rate of interest than other savings accounts. One thing you may appreciate about MMAs is that your money is liquid. In other words, you can access the funds when needed. That fact makes MMAs an excellent place to stow an emergency savings account.

Many MMAs offer some check-writing and debit card options, making it even easier to get your money when necessary.

Two advantages and two disadvantages:

Advantage No. 1: Your money earns interest.

Advantage No. 2: You can access your money when needed.

Disadvantage No. 1: Financial institutions are required to place certain restrictions on MMAs, including how often you can access your funds each month.

Disadvantage No. 2: You may be required to maintain a minimum balance to receive the highest interest rate.  

3. Debt repayment

One of the best ways to build wealth is to rid yourself of high-interest debt. Even if you have no trouble making minimum payments each month, high-interest debt slowly drains you of money that could be used to invest in your future or follow your dreams.

There are several great ways to systematically rid yourself of debt, including:

• Snowball method
• Debt avalanche
• Debt consolidation

The more money you free up each month, the more options you have to grow your money.

As part of a well-rounded portfolio

Planning for retirement and other future goals involves a balanced portfolio. Some of your investments may be risky but offer high rewards. Others may be low risk or totally risk free. It's all about finding the right balance for you.