Finding the Best Investments for Income in 2017

When planning for a comfortable retirement, and possibly an early one, many people wonder about the best fixed income investments. Investing wisely now in some low to medium risk fixed income investments can mean regular money coming in when you’re no longer working or just want to take some time to enjoy life.

A fixed income investor is simply someone that chooses investments that pay a return on a regular and fixed schedule. Income investing is most popular with retirees, because it can provide a stable and regular source of income. It’s also a smart option for anyone who has come into money through inheritance or winnings, because it can mean ongoing income from investments for many years afterwards.

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Award Emblem: Best Fixed Income Investments

If you’re not familiar with the different forms of investment income, it can be confusing to know where exactly to put your money. While a high interest investment might look tempting, it could also come with a lot of risk. Most people investing for income understand that there is a balance between interest and risk, and they prefer lower risk.

In this article, we are going to take a look at the top six best fixed income investments that you can make in 2017 to plan for your future. We will also go through some of the frequently asked questions about income investments and what to watch out for when you’re considering fixed income investing for your future.

If you’re willing to be patient and understand that it takes time for monthly income investments to grow, then you’ll have a much better chance of being right where you want to be when the time comes to rely on your investment for stable and regular monthly income.

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AdvisoryHQ’s List of the Top 6 Best Investments for Income

List is sorted alphabetically (click any of the investment for income names below to go directly to the detailed review section for that income investment):

Top 6 Best Income Investments | Brief Comparison & Ranking

Best Income Investments

Average Yield

Investment Category

Ticker Symbol

Alcoa Class B Preferred Shares


Preferred Stock


Fidelity® Intermediate Municipal Income


Municipal Bonds


Fidelity® Real Estate Investment Portfolio


Real Estate Mutual Fund


SPDR® Bloomberg Barclays Short Term High Yield Bond ETF


Exchange Traded Fund


Synchrony Bank Certificates of Deposit


Certificate of Deposit


Vanguard Intermediate-Term Treasury Fund


Mutual Fund


Table: Top 6 Best Investments for Income | Above list is sorted alphabetically

Best Income Investments FAQ | What Is Investment Income?

Most people are familiar with investing in the stock market and getting money through any gains made if the stock goes up, but they may not be as familiar with fixed income investments.

best income investments

Image Source: Best Income Investments

These types of investments are meant to provide regular income from investments, not just a one time pay-off. The best investments for income can come from the following:

  • Interest payments
  • Dividends
  • Capital gains
  • Other profits from investing

Even interest earned in a regular savings account is considered an income investment, although a fixed income investor will usually invest in vehicles that provide a higher return.

Are Taxes Paid on Income from Investments?

Yes, like other income from employment, income investments are also subject to income tax. The IRS has a Net Investment Income Tax, which is calculated on your payouts from fixed income investments, minus what you initially paid in.

The tax rate for income investing proceeds is currently 3.8 percent Net Investment Income Tax on the lesser of the net investment income, or the amount by which a fixed income investor’s modified adjusted gross income exceeds the statutory threshold amount based on their filing status. 

The statutory threshold amounts are:

  • Married filing jointly — $250,000
  • Married filing separately — $125,000
  • Single or head of household — $200,000
  • Qualifying widow(er) with a child — $250,000

Fixed Income Investments

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Best Income Investments FAQ | How Much Can You Make Investing for Income?

A common question when people are considering their monthly income investments options is, “How much income from investments can you expect down the road?”  Of course, this can vary widely according to the choices you make on your best investments for income and how well they do for you.

Another important factor is the length of time your investment has to mature. For example, 30-year fixed income investments will naturally produce more for you than those that have only had 15 years to grow. But that doesn’t mean that you don’t have short-term, high-yield choices as well.

To get a rough idea of what is possible with a $500,000 nest egg, Bankrate asked three financial planners to design a hypothetical portfolio for income investing retirees. While there is no guarantee, a rough estimate was approximately $25,000 per year that could be derived throughout their retirement (about 20 to 30 non-working years).

There are some helpful calculators online that give a fixed income investor an idea of what type of monthly income is possible from the best fixed income investments. Some of the inputs include yield and rate of return.

Investing for Income Calculators:

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Detailed Review – Top Ranking Best Investments for Income

Below, please find a detailed review of each product on our list of best fixed income investments. We have highlighted some of the factors that allowed these income investments to score so highly in our selection ranking.

Alcoa Class B Preferred Shares (AA.PRB) Review

This type of income investing is from preferred stock, which means it pays a fixed dividend to the holder, which takes priority over that of common stock. Alcoa was one of the original inventors of the aluminum industry, and they’ve been a prominent name in the metals industry since 1888.

Alcoa’s Class B Preferred stock has done very well, crossing a 7.5% yield mark in July of 2016. Expected dividend payments fall in the $6.71 to $7.53 per share range. The stock has held up well over time, which is why it’s included on our best income investments list. When dealing with stock for your income investments, you will usually be in the medium risk category.

Stability and payout of regular dividends makes this preferred stock a great one to consider for fixed income investing.

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Fidelity® Intermediate Municipal Income (FLTMX) Review

This municipal income fund from Fidelity® seeks the highest level of income exempt from federal income taxes that can be obtained consistent with the preservation of capital. This is one of the monthly income investments that has as average total return over the life of the investment of 5.65%.

This fund typically invests at least 80% of assets in investment-grade municipal securities whose interest is exempt from federal income tax. Municipal securities are interest-paying debt securities that state and municipal governments issue to finance operating expenditures.

We chose this as one of the best income investments because the fund has returned 4.51 percent over the past year, 4.13 percent over the past three years, and 3.46 percent over the past five years.

Fidelity® Intermediate Municipal Income (FLTMX) - best investments for income

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Fidelity® Real Estate Investment Portfolio (FRESX) Review

Some consider real estate investments as one of the more risky best investments for income, but they can often also give a higher return.  This type of portfolio is an investment in companies that own income-producing real estate.

The Fidelity® Real Estate Investment Portfolio consists of investment in some Real Estate Investment Trusts (REITs), such as Simon Property Group Inc. (SPG), which owns multiple malls and shopping centers, along with other companies whose holdings include commercial office buildings, apartment buildings, warehouses, self-storage, hospitals, and hotels.

This real estate mutual fund was chosen as one of the best fixed income investments due to the high returns, which have had a year-to-date daily average of 6.04%, with annual average returns at 12.78% (3 years), 12.18% (5 years), and 4.22% (10 years).

SPDR® Bloomberg Barclays Short Term High Yield Bond ETF (SJNK) Review

An exchange-traded fund (ETF) is traded on the stock exchanges, similar to stock, but they can hold several different asset types, including stocks, commodities, or bonds. Most ETFs track an index, such as a stock or bond index.

A benefit of the ETF for a fixed income investor is that they generally have a higher daily liquidity and lower fees than mutual fund shares. This investment is from State Street Global Advisors SPDR®, and the high fund yields make the SPDR® Bloomberg Barclays Short Term High Yield Bond EFT attractive for monthly income investments.

The average maturity in years is 3.19, and the yield to maturity is currently 6.70%. 30-day SEC yield is 5.71%. For those looking for shorter-term income investing options, this ETF can offer decent returns with less time than some other income from investments.

Synchrony Bank Certificates of Deposit Review

While a Certificate of Deposit (CD) may not have the flashy high yield of some of the other best income investments, it has the extremely low risk that makes many people more comfortable than other options.  A CD is basically a timed deposit at a bank or credit union, and you’re rewarded with a higher interest rate the longer you let them hold the deposit without any withdrawals.

Synchrony Bank has had their deposit products recognized by Bankrate.com®, MONEY® Magazine, and Kiplinger. Synchrony Bank Certificates of Deposit have a choice of terms ranging from 3 months to 60 months with the following annual percentage yields attached.

  • 6 months – 0.41% APY
  • 9 months – 0.45% APY
  • 12 months – 1.25% APY
  • 18 months – 1.25% APY
  • 24 months – 1.45% APY
  • 36 months – 1.50% APY
  • 48 months – 1.60% APY
  • 60 months – 1.80% APY

The minimum deposit amount is $2,000, and this is one of the income investments that is treated like a bank account in that it is FDIC insured up to $250,000 per depositor, per insured bank, for each ownership category.

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Vanguard Intermediate-Term Treasury Fund (VFITX) Review

If you are investing for income and prefer the lower risk category, then a treasury fund investment is another that is on the safer side. This type of fixed income investing involves an investment fund that pools money to purchase low-risk U.S. Treasury  securities, such as bills, notes, and bonds.

The Vanguard Group, Inc. has a well-established reputation and is one of the world’s largest investment companies. Their Vanguard Intermediate-Term Treasury Fund made our list of the best fixed income investments because of the steady growth combined with the lower risk for a fixed income investor.

The annual average returns are 0.86% (1 year), 1.83% (3 year), 1.50% (5 year), and 4.31% (10 year). Since inception, the annual average return rate has been 5.87%.

Conclusion – Top 6 Best Fixed Income Investments

When planning for a future retirement and ongoing investment income to see you through your “Golden Years,” there are some great choices for both short- and long-term fixed income investments. You can also choose between lower or higher risk depending upon your comfort level and financial security.

If you’re looking for one of the best income investments that is more short-term with a higher potential return, then you may want to consider the Fidelity® Real Estate Investment Portfolio or the SPDR® Bloomberg Barclays Short Term High Yield Bond ETF.

If you are more of a low-risk person, then a Synchony Bank Certificate of Deposit or the Vanguard Intermediate-Term Treasury Fund might fit your comfort level better. These are both best income investments with very low risk.

The Fidelity® Intermediate Municipal Income Fund comes up somewhat in the middle, closer to the low risk category since this is one of the monthly income investments tied to government offerings.

No matter how much time you have before you plan to retire, you have several options for fixed income investments that can help you supplement your Social Security with a regular stream of income. You’ll want to review each of these best investments for income thoroughly to find the one that fits your lifestyle and risk level best.

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