High-Yield Investments: The Best Income Investments in 2026
Treasury bonds, CDs, money market funds, corporate bonds, dividend stocks and more, ranked from safest to riskiest, with current yields.
Key takeaways
- In late September 2026, the 10-year Treasury yielded about 5.3%, its highest level since 2002, and 3-month Treasury bills about 4.1% to 4.2%.
- With inflation at 3.4%, high-quality bonds now offer a positive real yield of roughly 2%.
- Higher yields always come with higher risk: credit risk, interest rate risk or the risk of losing principal.
- A balanced income portfolio combines safe cash and Treasuries with a measured share of corporate bonds and dividend stocks.
For more than a decade after the 2008 financial crisis, savers earned almost nothing on safe investments. That has changed dramatically. After the Federal Reserve raised its key rate to 3.75%–4.00% in September 2026, and long-term Treasury yields climbed above 5%, investors can earn meaningful income without taking extreme risks. This guide compares the main high-yield and income investments and explains what each one really involves.
High-yield investments compared
| Investment | Approx. yield (late Sept. 2026) | Risk level | Liquidity |
|---|---|---|---|
| High-yield savings account | up to ~4.25% APY | Very low (deposit insured) | Daily |
| Money market funds | ~3.6%–3.9% | Very low | Daily |
| Certificates of deposit (CDs) | top offers up to ~5% APY | Very low (deposit insured) | Locked until maturity |
| Treasury bills (3 months) | ~4.1%–4.2% | Very low | High |
| Treasury notes and bonds (10–30 years) | ~5.3%–5.6% | Low credit risk, high rate risk | High |
| Investment-grade corporate bonds | ~6.0% | Low to moderate | High (via funds) |
| High-yield ("junk") corporate bonds | ~8.1% | Moderate to high | Medium to high |
| Dividend stocks and ETFs | ~2%–4% | Moderate to high | High |
| REITs | ~4%–6% | Moderate to high | High |
| Covered-call ETFs | ~7%–9% | Moderate to high | High |
Yields based on bank rate surveys, money market fund data, Treasury market data and ICE BofA bond index yields reported in late September 2026. They change daily.
The safest income: cash and short-term Treasuries
High-yield savings accounts and money market funds
For your emergency fund and money you need within a year or two, a high-yield savings account or a money market fund is hard to beat. Savings accounts at insured banks are protected by FDIC insurance up to $250,000 per depositor, per bank, per ownership category. Money market funds are not insured but invest in very short-term, high-quality debt. Both rates change quickly when the Fed moves.
Certificates of deposit
CDs lock in a rate for a fixed term. In October 2026, the best offers reached around 5% APY for selected terms, far above the national average of under 2%. Shopping around at online banks matters.
Treasury bills
Treasury bills mature in one year or less and are backed by the US government. Their interest is exempt from state and local income taxes, which can make them more attractive than CDs for residents of high-tax states. You can buy them at most brokers or directly at TreasuryDirect.
Treasury bonds: high yields with interest rate risk
Longer-term Treasuries now pay more than at almost any time in the past two decades: around 5.3% for 10 years and 5.6% for 30 years at the end of September 2026. Credit risk is minimal, but interest rate risk is real: when market rates rise, existing bonds lose value.
How rate changes affect bond prices
A newly issued 10-year Treasury note would lose roughly 7% to 8% of its market value if yields rose by one percentage point. A 30-year bond could lose about 14%. If you hold a bond to maturity, you still receive the full face value, but bond funds have no maturity date, so their prices fluctuate permanently.
One way to manage this is a bond ladder: you buy Treasuries maturing in different years, reinvesting each one as it comes due. It works like the CD ladder strategy.
Inflation-protected Treasuries (TIPS) and Series I savings bonds adjust for inflation, which can make sense when inflation is running above the Fed's 2% target, as it did in 2026.
Corporate bonds: more yield, more credit risk
- Investment-grade bonds, issued by financially strong companies, yielded about 6% in late September 2026, roughly 0.8 percentage points more than comparable Treasuries.
- High-yield or "junk" bonds, issued by companies with weaker credit ratings, yielded around 8%. The extra yield over Treasuries, about 2.8 to 2.9 percentage points, was low by historical standards, meaning investors were not being paid much for the added default risk.
- The riskiest bonds (rated CCC and below) yielded more than 16%, a sign of significant default expectations.
Most individual investors are better served by diversified bond funds or ETFs than by buying single corporate bonds. Check the fund's average credit quality, duration and expense ratio.
Dividend stocks, REITs and option-income funds
Equity income investments can grow their payouts over time, but they carry stock market risk:
- Dividend stocks and ETFs: quality dividend ETFs yielded around 2% to 3.5%, with potential for growing income. See dividend investing.
- REITs, which own real estate and must distribute most of their income, often yield 4% to 6% but are sensitive to interest rates; REITs were among the weakest sectors in September 2026.
- Covered-call ETFs sell options to generate high monthly payouts of 7% or more, at the cost of giving up part of the upside in rising markets.
- Business development companies (BDCs) and preferred stocks offer high yields with credit and interest rate risks that resemble high-yield bonds.
Taxes: compare after-tax yields
- Treasury interest: federal tax, but no state or local tax.
- Bank interest, CDs, corporate bonds: taxed as ordinary income.
- Municipal bonds: interest is generally free of federal tax. At a 32% federal tax rate, a 4% municipal yield equals about 5.9% from a taxable bond.
- Qualified dividends: lower tax rates of 0%, 15% or 20%.
- REIT dividends: mostly ordinary income.
Holding taxable bonds and REITs in IRAs or 401(k)s, and qualified-dividend stocks or Treasuries in taxable accounts, can improve your after-tax income.
How to build an income portfolio
- Cash layer: one to two years of planned spending in savings, money market funds or T-bills.
- Safety layer: a Treasury or CD ladder covering the next three to seven years.
- Income layer: investment-grade bond funds and quality dividend funds.
- Growth layer: broad stock index funds so your income can keep up with inflation over a long retirement.
- Optional satellite: a small share of high-yield bonds, REITs or option-income funds for extra yield.
How much income you need and how long it must last determine the size of each layer. Our guide to passive income from investing shows the capital required for $1,000 or $2,000 a month.
Red flags: when "high yield" means high risk
- Promises of guaranteed returns well above Treasury yields.
- Products you cannot sell easily, with complex fee structures.
- Unregistered investments, private notes or crypto "yield" programs.
- Funds whose payouts consistently exceed their income, slowly returning your own capital.
Frequently asked questions
What is the safest high-yield investment?
Treasury bills and FDIC-insured savings accounts or CDs offer the highest safety. In 2026 they pay around 4% or more.
Are Treasury bonds a good investment right now?
With 10-year yields around 5.3% and inflation at 3.4%, Treasuries offer a positive real return. The risk is that yields rise further, which would lower bond prices in the short term.
What are high-yield ETFs?
Funds that hold higher-yielding assets such as junk bonds, dividend stocks or option strategies. They pay more income but carry more risk than broad bond or stock funds.
Is a 10% yield safe?
Rarely. With safe assets yielding around 4% to 5%, a 10% yield implies substantial risk of default, dividend cuts or loss of principal.
Should I move all my money into bonds now that yields are high?
Probably not. High yields are attractive for income and stability, but stocks remain important for long-term growth. Your allocation should reflect your goals and time horizon.
