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Investors looking for higher yields might want to consider these hybrid products, which blend the possibility of better returns with less downside risk than traditional investing.
By
Jared Elson, Investment Adviser
published
3 March 2026
in Features
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When the stock market became particularly volatile in early 2025, many investors began looking for safer investment vehicles. They were often disappointed.
One of the safest places to put your money is an FDIC-insured savings account. However, with interest rates as low as 0.01%, that safety comes with a considerable caveat in the form of inflation.
If you put $100,000 into such an account, you'll have made $10 in interest after a year. Before you go on a spending spree, keep in mind that such accounts often carry fees. One common 0.01% APY savings account charges $8 per year, leaving you with just $2 in profit.
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Sign upWith inflation hovering near 3%, it's easy to see how saving in such a low-yield account actually costs you spending power.
On the other side of the spectrum, the S&P 500 yields an average of 10% growth per year, which can mean significant gains for your portfolio over time.
As investors experienced firsthand when the stock market tumbled for days in late March and early April of 2025, such growth potential is accompanied by considerably more risk than savings accounts.
The market rapidly recovered, but that's not always the case — hence the use of the words "investing" vs "savings."
About Adviser Intel
The author of this article is a participant in Kiplinger's Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.
CDs have been a tempting option in this era of elevated interest rates, but those rates are on the way down. As such accounts mature, investors look for ways to at least maintain similar interest rates to the ones they'd been enjoying.
For those investors willing to take on slightly more risk than CDs, there are a few interesting options.
Structured notes
One example of a way to take on a little more risk in exchange for a higher yield is to buy an enhanced-yield bond from a financial institution.
An example of such a bond, known as a structured note, would be an indexed bond that pays 8% for the term of the note. If the index performs well, at the bond's maturity, you'll get your principal plus 8%. If the index performs poorly, you'll get only your principal.
Such bonds often have terms protecting the financial institution from particularly poor market performance. A common example is that if the index is down more than 30% when the bond matures, you get your original principal, less the amount that index has dropped.
Clearly, this is a higher-risk proposition than a regular bond or a CD because there's a possibility that you'll lose part or all of your principal, but it's a lower risk than investing directly in the market.
Buffer ETFs
Another interesting investment product that acts as a hybrid between risky market investments and safe low-yield choices is the buffer ETF.
"Buffer" refers to the downside buffer component of the ETF. That downside buffer can be as much as 100%, which means no matter how much the ETF's market drops, you won't lose your principal investment as long as you hold it to maturity, most often a one-year period.
Choosing an ETF with a buffer that's less than 100% often has the potential for higher returns, but at the expense of risking part of your principal investment.
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If you're trying to decide between a structured note and a buffer ETF, bear in mind that structured notes are generally targeted at higher-net-worth investors and carry higher minimum investments.
Frequently, a buffer ETF doesn't have a minimum investment requirement, which means anyone can participate at any level they wish.
While these investment options often don't offer complete safety, the willingness to take on a small amount of risk can offer a higher potential return than standard "safe" investments like CDs.
These blending tools can be a compelling way to get a better return with less downside risk than traditional riskier investment options.
Needless to say, investing is complex and shouldn't be undertaken alone. It's important to work with your financial adviser to determine the products that make the most sense for you and your unique situation.
Related Content
- Why Playing It Safe in Retirement Is a Big Risk
- For a More Secure Retirement, Build in Some 'Safe Money'
- Smart Money Moves Savers Should Make in 2026
- Are You Investing to Score Points or Make Money? Cautionary Tales From an Investment Adviser
- I'm an Investment Adviser: Here's Why You Should Resist a Zero-Down Mortgage
This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
TOPICS Adviser Intel Get Kiplinger Today newsletter — freeContact me with news and offers from other Future brandsReceive email from us on behalf of our trusted partners or sponsorsBy submitting your information you agree to the Terms & Conditions and Privacy Policy and are aged 16 or over.
Jared Elson, Investment AdviserSocial Links NavigationCEO, Authentikos AdvisoryJared Elson is a Series 65 Licensed Investment Adviser Representative (IAR) and the CEO of Authentikos Advisory. Following a 10-year career with Yahoo, Jared identified an acute need for sound financial counsel in the tech industry and has excelled in giving tech professionals the tools they need to grow and preserve their wealth.
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