3 Ultra-Safe Fixed Income ETFs That Can Double the Average CD Rate

The Motley Fool

by newsfeedback@fool.com (David Dierking)

February 25, 2026

AI-Generated Deep Dive Summary

Investors seeking reliable income often turn to certificates of deposit (CDs) due to their safety and predictable returns. However, CDs typically offer lower yields compared to other investment options. The national average rate for a 12-month CD hovers around 1.5-1.6%, which can be less appealing when higher-yielding alternatives exist. While some CDs may offer better rates, they often come with drawbacks like high minimum investments, penalties for early withdrawal, or fees. Enter fixed income ETFs—a game-changer for those looking to enhance their yield without sacrificing too much safety. Unlike CDs, these ETFs provide greater flexibility and potentially higher returns. Many fixed income ETFs currently offer yields of up to 4% or more, with minimal risks and no lock-in periods. This makes them an attractive option for investors who want a balance between safety and higher returns. One key advantage of fixed income ETFs is their variety and accessibility. Unlike CDs, which may require large minimum deposits or impose strict terms, ETFs often have lower barriers to entry and fewer restrictions. Additionally, the market for fixed income ETFs continues to expand, offering investors even more choices to suit their risk tolerance and yield goals. While ETFs do not come with FDIC insurance like CDs, they are generally considered low-risk investments due to their focus on short-term debt instruments. This makes them a viable alternative for conservative investors seeking better yields than traditional CDs can offer. The combination of flexibility, higher returns, and manageable risks positions fixed income ETFs as an appealing option in today’s financial landscape. For readers interested in optimizing their finances, understanding the potential of fixed income ETFs is crucial. These investments not only provide a way to enhance yield but also align with the goal of maintaining financial security without exposing oneself to excessive risk. By exploring these options, investors can make informed decisions that better meet their financial needs and objectives.

Verticals

financeinvesting

Originally published on The Motley Fool on 2/25/2026