Forget CDs: 3 Ultra-Safe ETFs That Pay More and Don't Lock Up Your Money

"CDs offer fixed income up to maturity, and some banks let you lock in high interest rates for multiple years. However, there's one major catch with CDs. You typically cannot access your money until the CD matures. Technically, you can withdraw from a CD, but you will then incur a penalty fee that will wipe out all of the interest you gained."

"If you ever invest in a CD, you must treat it as money that you cannot touch until maturity. Most investors do not like that lack of flexibility, and that's why more investors are turning to high-yield ETFs. These funds have higher rates than most CDs and don't lock up your money at all. If an emergency strikes, you can sell your ETF shares if necessary without incurring a penalty. You also get solid cash flow from any of these funds."

"Almost 80% of its total assets are in A-rated bonds or higher, with 67% of its bonds having an AAA grade. None of the fund's bonds has a rating below B. This setup means the Fidelity Total Bond ETF only invests in the most reliable corporations and governments. Notably, it does not hold any municipal bonds, preferring to place a strong focus on government and corporate bonds."

Certificates of deposit (CDs) provide fixed income until maturity but generally restrict access and impose penalties that can eliminate earned interest on early withdrawal. Many investors prefer high-yield exchange-traded funds (ETFs) because they typically offer higher rates and allow immediate liquidity by selling shares without penalties, while providing steady cash distributions. The Fidelity Total Bond ETF (FBND) is a low-volatility, high-quality bond fund with a 4.48% SEC yield, 0.36% expense ratio, about 80% A-rated-or-better holdings and over 4,300 bonds, focused on government and corporate bonds rather than municipals. The JPMorgan Equity Premium Income ETF (JEPI) targets higher income (6.97% SEC yield) by selling S&P 500 call options, and its distributions are treated as ordinary income for tax purposes.

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