4 Low-Risk Investment Options for Risk-Averse Investors in 2025

Not everyone has the appetite for high-stakes investing — and that’s completely okay. In fact, many Australians identify as risk-averse, meaning they prefer to avoid high-volatility or speculative investments in favour of more secure, predictable returns.

Whether you're nearing retirement, building your first portfolio, or simply want to preserve capital, having the right investment instruments matters.

Here are four investment vehicles ideally suited for risk-averse investors in 2025:

1. Term Deposits

Best for: Short to medium-term capital parking with guaranteed returns.

A term deposit is arguably the most straightforward low-risk investment option in Australia. Offered by banks and credit unions, term deposits provide a fixed interest rate over a specified period — usually ranging from 1 month to 5 years.

The key benefit? Your capital is guaranteed up to $250,000 by the Financial Claims Scheme (FCS) per authorised deposit-taking institution. While interest rates may not be dazzling (typically around 4–5% p.a. as of mid-2025), they offer stability and zero exposure to market swings.

Tip: Laddering your term deposits (investing in multiple maturities) can help improve flexibility and access to funds when needed.

2. Government Bonds

Best for: Reliable income with minimal risk exposure.

Government bonds — especially Commonwealth Government Securities (CGS) and retail bonds like Treasury Indexed Bonds, Exchange-traded Treasury Bonds, or Green Bonds — are among the safest instruments for conservative investors.

You can choose between fixed coupon bonds (such as ORI or SR in Indonesia) or floating rate bonds (akin to SBR/ST), depending on your outlook. These investments pay periodic interest and return the full principal at maturity.

With Australia’s AAA credit rating and inflation under control, these instruments offer slightly better yields than term deposits, with manageable liquidity through bond markets.

Note: You can also access them via platforms like the ASX or through managed funds if you prefer indirect exposure.

3. Money Market Funds (Cash Management Trusts)

Best for: Short-term liquidity with better returns than savings accounts.

Money market funds — known locally as Cash Management Trusts (CMTs) or part of money market managed funds — invest in highly liquid, short-term instruments like Treasury notes, bank bills, and commercial paper.

While they’re technically not guaranteed, the assets in these funds are highly rated and low-risk, making them suitable for risk-averse investors seeking flexibility without locking in their capital.

The return is typically higher than standard savings or transaction accounts but lower than fixed-term investments. The biggest advantage is that they offer daily liquidity — so your money is accessible if needed.

Compare: Check out providers like Vanguard or Betashares for low-fee options with solid track records.

4. Physical Gold (Bullion)

Best for: Long-term preservation of wealth and inflation hedge.

Gold has long been a go-to safe haven — especially in times of market uncertainty or currency depreciation. While its price can be volatile in the short term, physical gold bars or coins remain a tangible store of value over the long haul.

For risk-averse investors, gold isn't for speculative trading. Instead, it’s a hedging asset that can balance out your portfolio in periods of economic stress or when interest rates fall.

That said, there are a few caveats:

• Storage and insurance can add to the cost.

• Bid-ask spreads are often wider for branded bars.

• Not as liquid as digital gold or ETFs.

Pro tip: Stick to well-known mints (e.g. Perth Mint) and avoid overpaying for collectible or branded bars if your focus is investment.

Final Thoughts

Being risk-averse doesn’t mean missing out on wealth-building opportunities. It just means you’re looking for ways to grow your capital safely and steadily. With instruments like term deposits, government bonds, money market funds, and physical gold, you can create a resilient, low-risk portfolio tailored to your comfort level.

The key is to diversify, keep an eye on fees, and match your investments with your time horizon and goals.

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