How to Invest Despite Falling Interest Rates While the Federal Reserve is actively on call trying to help balance the economy, interest rates are at historic lows. The hopes is that these falling interest rates will stimulate borrowing activity as with a low rate, money is cheap. Although this move is a fantastic opportunity for consumers to refinance their loans, secure a first mortgage or secure a car loan, it is bad for investors. Those with money to invest and are looking for a high yield rate of return are going to find limited opportunities until the market stabilizes and interest rates are raised. But how should you invest money despite falling interest rates? There are plenty of options to choose from.

Certificate of Deposits

One great way to hedge your bet is buy building yourself a CD ladders. Certificates of deposits are timed investments that guarantee depositors a fixed rate of return and no risk to the principal. Typically these interest rates are already higher than those offered on savings accounts because of the time commitment, but they are still low. With a bit of pre-planning you can find a variety of CDs with higher than average interest rates and upon their maturity, move the initial investment into another CD option. The goal is to have a multitude of investments and different maturity dates so when the interest rates are hot, you will have money available to invest.

Short- to Mid-Term Treasury Bonds

Treasury bonds were born out of governmental financial strife. When the government needs money to finance wars or other military expenses, bonds are issued. Consumers buy the bonds hold onto them until they mature. During that time period the government will use the money, but will pay it back in full and with interest when the time comes. Typically bonds take decades to reach maturity, but the government will not risk not paying back consumers, thus keeping your principal safe.

Refinance Your Mortgage

To this day, many people still think that owning property is the best way to achieve long-term wealth. If you already have a mortgage, but can secure a new one that is a full interest rate point less than the original terms, you can reduce your monthly expenses by hundreds of dollars immediately and tens of thousands in the long run. If you cannot beat the falling interest rates, you might as well take advantage of them. In the long run, what goes up must come down and vice-versa. All you need is the patience and dedication to ride out this storm and high interest are on the horizon.