In today’s financial landscape—marked by high uncertainty and constant market fluctuations—many investors face the challenge of finding options that allow them to protect their capital through low-risk investments. The recent reduction of interest rates by the European Central Bank to 2.5% has decreased the appeal of traditional alternatives, pushing conservative investors to explore new strategies.
While there is no such thing as a zero-risk investment, some options present significantly lower risk than others. In this context, it is crucial to identify and understand the low-risk investment options available, ranging from traditional products like fixed income and bank deposits to more innovative alternatives like real estate crowdfunding.
“We live in a highly uncertain environment, so it’s essential to understand three key concepts: liquidity, risk, and return. These three elements are always interconnected, and an investor’s profile helps determine which products are most suitable,” explains José Antonio Pérez Muriel, regional delegate of the EFPA Spain Services Committee.
Bank Deposits: a Savings Option with Protection
Although bank deposits are generally considered savings products rather than investment products, they remain an interesting option for those seeking security and stability. Deposits are covered by the Deposit Guarantee Fund, meaning that if the bank faces liquidity issues, your savings are insured up to €100,000 per institution.
In 2025, fixed-term deposit rates have decreased, but they still offer moderate returns today, especially for short-term deposits (3 to 6 months). However, it’s important to note that these products typically offer lower returns compared to other options like investment funds.
Investment Options: from Fixed Income to Equities
When deciding to invest, it’s important to understand the various available options. Generally, investments are divided into two major categories: fixed income and equities.
Fixed income is a safer choice because it involves investing in products that provide regular interest payments and return the invested amount at the end of a set term, whereas equities depend on market performance. Here, returns are not guaranteed, as the value of the investment can rise or fall based on asset behavior.
“I always like to point out that general recommendations are of little use. Determining a suitable investment strategy requires considering key factors like the investor’s risk profile, investment horizon, and financial capacity,” says the EFPA Spain delegate. “Once the client is properly profiled, the advisor’s knowledge of them will help identify the best financial solution together.”
Money Market Funds
Money market funds are an excellent fixed-income option for investors seeking slightly higher returns without taking on excessive risk. These funds invest in short-term debt instruments such as government bonds or promissory notes from very stable companies, offering moderate returns with relatively low risk.
In 2025, money market funds remain a relatively appealing alternative due to their high liquidity and safety, despite slightly lower yields resulting from interest rate cuts.
Government Bonds
Government debt is another attractive option for investors looking for stability. Sovereign bonds from countries with high credit ratings, such as Spain or Germany, continue to be a very safe investment, though their returns are modest. Currently, the Spanish 2-year bond offers a yield of 2.4%, while the 3-year bond stands at 2.54%.
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Fixed Income Funds
Fixed income funds, on the other hand, typically invest in bonds with longer maturities than money market funds, which can offer higher returns in exchange for lower liquidity. According to Inverco data, by the end of 2024, fixed income funds recorded an average annual return of 3.54%, demonstrating that even in a complex economic environment, these funds have provided attractive returns and have become a solid choice for investors seeking stability and moderate gains—without venturing into equities.
Guaranteed Funds
Guaranteed funds are another popular option among conservative investors, especially those who want the assurance that they won’t lose their initial investment. As the name suggests, these funds guarantee that you’ll recover the invested capital, regardless of market performance. In exchange for this security, returns are usually lower, but still positive.
Mixed Funds
While low-risk environments typically focus on instruments like fixed income, equities can also play a role in a diversified strategy—particularly for those seeking higher long-term returns.
To reduce the associated risk, one option to consider is investing in mixed funds, which combine equities with safer assets such as fixed income, thereby striking a balance that can deliver attractive returns without assuming excessive risk.
In 2025, mixed funds are delivering returns close to 9%, outperforming fixed income funds without being exposed to the full volatility of pure equities. Additionally, these funds are actively managed, allowing managers to adjust positions based on market conditions to optimize the risk-return balance.
“Diversification remains the best ally to mitigate risk. Even with limited resources, it’s possible to build a balanced portfolio that combines fixed income and equities. Investment funds allow access to diversified markets and assets with small amounts,” says Pérez Muriel. “Many also allow periodic contributions, which help smooth volatility through the well-known concept of cost averaging.”
Real Estate Crowdfunding: Collective Investment in Real Estate
Real estate crowdfunding has emerged as an innovative and accessible option for investors looking to diversify their portfolios without needing large amounts of capital—while maintaining low risk. This investment model allows participation in carefully selected real estate projects, reducing risk while offering attractive returns.
A clear example of this trend is Urbanitae, a leading platform in Spain that has revolutionized the way people invest in real estate. In 2024, Urbanitae raised €213 million in collective funding—a 60% increase over the previous year—reaching a total of €480 million since its launch in 2019. With over 28,000 investors and 191 funded projects, the platform has achieved an average return of over 13% and has successfully completed all of its projects.
“Today’s small investor is increasingly informed and educated, seeking alternatives to traditional savings and opening up to products that were previously unknown or dismissed. However, it’s essential to always keep part of one’s wealth in liquid products and avoid investing in something that isn’t fully understood,” concludes José Antonio Pérez Muriel. “Financial education and professional guidance are key—especially during the first steps.”
