For people not needing the interest payments now, they may elect zero-coupon bonds. Everything in life is about trade-offs. Having a guaranteed and safe return on part of your retirement investments is a good idea, but keep in mind there can be hefty penalties and taxes to get your money out of an annuity early. However, for short-term savings, such as your emergency fund or personal savings, you need an account that keeps your money safe until you need it — while also bringing in a little interest to add to it. Click here for details. The U. The investments described in the list above would be categorized as a 1 or 2 on such a scale.