What type of investments are generally characterized by having lower risk and consistent returns?

Certificates of deposit (CDs) are a type of investment that typically offers lower risk compared to other options, such as stocks or cryptocurrencies. They are offered by banks and other financial institutions and require the investor to lock in their money for a fixed term in exchange for a guaranteed interest rate. This means that investors can expect consistent returns, as the interest is predetermined, providing a reliable source of income.

Because CDs are insured by the Federal Deposit Insurance Corporation (FDIC) up to certain limits, they also come with the benefit of principal protection. This insurance adds an extra layer of safety, making CDs a particularly attractive option for risk-averse investors or those looking for stability in their investment portfolio.

In contrast, high-yield savings accounts, while also relatively safe, do not typically provide the same level of guaranteed returns as CDs, and stock investments, especially in emerging markets, can entail significant volatility and risk. Cryptocurrencies are known for their high risk and price fluctuations, thus not fitting the criteria of consistent returns with lower risk. This reinforces that the nature of CDs aligns with the characteristics of lower-risk, consistent-return investments.