Best income investments: how to rank them

The best income investment is the one that pays you the most after tax at the level of risk you accept, and pays when you need it. IncomeGrid helps you discover higher-yield income opportunities you may not have looked at, so you can earn more on the same money. It has 40,000+ investment options screened, each with its yield, after-tax yield and a risk level from 1 to 5.

Ranking by risk level

Risk	Typical options	What drives the yield
Lower	Treasuries, insured deposits, government money-market funds	Interest rates
Moderate	Agency, high-grade municipal and company bonds, bond funds	Rates plus some credit risk
Higher	High-yield bonds, REITs, dividend stocks	Credit, business and property risk
Highest	Some filed offerings, non-traded REITs and BDCs	Credit, liquidity and complexity

Why after-tax yield is the real ranking

Income is taxed as it arrives, so the order of 'best' changes with where you live. For someone in a high-tax state, a Treasury or in-state municipal bond can outrank a taxable bond with a higher headline yield. Use the yield calculator to compare two options yourself.

Don't rank by yield alone

An unusually high yield often signals a price drop or a weak issuer.
A fund's yield can change monthly.
Dividends can be cut; bond issuers can default.
Spreading money across many issuers lowers the damage from any one.

Build it as a portfolio

Mixing several income types gives smoother income than any single investment. See IncomeGrid's example portfolios, built from 40,000+ investment options screened.

Matching income to spending

If bills are monthly, choose some investments that pay monthly or stagger quarterly and semi-annual payers so payments arrive in different months. Bond ladders return principal on known dates, which suits planned expenses. Keep a cash buffer so a missed or reduced payment doesn't force a sale.

Taxable vs tax-advantaged accounts

The best income investment for a Roth IRA may differ from the best one for a taxable account. In a tax-free or tax-deferred account, high taxable yields are not reduced each year by tax; in a taxable account, Treasuries and munis gain from their exemptions. Placing each investment in the right account is a way to earn more without taking more risk.

How IncomeGrid helps you earn more

IncomeGrid helps you discover higher-yield income opportunities you may not have looked at, so you can earn more on the same money. It has 40,000+ investment options screened, each with its yield, after-tax yield and a risk level from 1 to 5. Choose where you live and every yield is shown after federal, state and each investment type tax, so you can see which options pay you more.

Rank income investments for you → or browse example income portfolios

Frequently asked questions

What are the best investments for income?

There is no single answer: compare after-tax yield within your risk level and spread money across several types.

Which income investments are safest?

Treasury securities and FDIC-insured deposits carry the least credit risk.

Are dividend stocks good income investments?

They can be, with price risk and dividends that can change. See dividend income.

Not investment advice. General information only; yields change, check the source before acting.