Low interest rates often give investors a panic attack. They wonder how they will meet their investment goals if the interest rates continue to be low. However, there are few avenues which you can undertake, in order to continue gaining income even when the interest rates are low. You can utilize the period of low interest rates to take a review of your portfolio, and try to diversify it in order to distribute the risk. Make small changes to your portfolio to gain income during the low rate period. Also, don't think that earning a low interest rate is bad. It is possible that your return on investment may not suffer as much as you anticipate. Be on the lookout for buying and selling opportunities, and explore alternate financial instruments other than depositing money in the bank. As you may not like to invest your money or lock it for a duration when the rates are lower, consult your investment adviser and search for other lucrative alternatives. Here are a few investment options that can be utilized when investing in a low interest rate environment. Preferred stocks or preference shares are hybrid financial investments, as they have properties of both equity and debt instruments. The interesting aspect about it is that the dividend on preferred stock is fixed, and is paid to you before any other common stockholders. Though a preferred stockholder may not have any voting rights, he may get preference, when it comes to claiming the assets, in case of a financial problem faced by the company. This will ensure that you will get an income in terms of dividend, even in the low interest rate environment. Another important vehicle of investment is a Certificate of Deposit (CD). It is a time deposit which is sold by banks, credit unions, and thrift institutions. Like your savings account, a CD is insured and hence, is risk free. It has a specific term and fixed rate of interest. The rate of interest is higher than other flexible accounts which allow withdrawal of money before completion of the term. However, if you invest in a long-term CD at a low interest rate, your money will be blocked for a certain duration without much returns. Also, if you withdraw money before duration, there is a penalty attached with it. Hence, it is advisable to ladder your CDs. It means, that you will have to invest in different short-term CDs with varying dates of maturity. You can then invest the proceeds in one long-term CD with a higher rate. During the time when the rate of interest is low, you can invest in companies that pay high dividends. Dividend stocks tend to outperform the overall market during such business conditions. This can lead to a rising stream of income, which is not possible in case of bonds. You must choose your dividend paying companies carefully, as this form of investment is not guaranteed by the FDIC, and you may lose a part or whole of its value. Also, check out the risk of dividend tax rates. Invest in companies that are stable and have a sound history of raising distributions. A dividend investment can also lead to an inflation hedge, as companies transfer the rising prices to the cost for consumers and it leads to increase in profits, and thereby, higher returns in terms of dividends. It is advisable that you invest in well performing blue chip companies. Investing in metal assets can add risk to your portfolio. Also, it does not generate too much income. However, it can be a good way to invest your money during a low rate market condition. Gold is more suitable for the normal interest rate environment, as it is extremely sensitive to price fluctuations. Hence, investing in gold stocks is not advisable at all. You still have the option of investing in silver. There are many established metal traders from whom you can buy blocks of silver, and sell it when the price increases. You can also treat this as a long-term investment. You can also opt for annuities in which you can create an annuity contract with an insurance company, which takes care of your retirement and other long-term income goals. In an annuity, a person pays a single lump sum premium to the company (insurer). This is distributed back to you by the insurer in terms of periodic payments. The payments may start immediately or at a particular date. Generally, variable annuities grow in a favorable market. You should try to invest in variable annuities, where usually the insurer guarantees a return of your premium, in case there is a problem with the market. Many people utilize these investments to accumulate funds without income or for capital gains, and often go for withdrawal of the amount before the term. So, you can also benefit from a variable annuity that allows withdrawal and re-invest it. Whatever type of facility—whether residential, commercial or rental—real estate is one of the best investments during a low interest rate scenario. Many people prefer to invest their hard-earned money in this transparent and risk-free investment option, that is bound to fetch excellent returns over a period of time. It does not get affected by the uncertainties of the market, and is relatively, a safe way of investing money. You can also benefit by availing property loans or mortgages for a lower interest rate. Also, in case you are buying a rental property, low rate of interests ensure that your borrowing cost and rental charges result in a positive income for you. Bonds are fixed income investments that act like a debt security. A bond obligates the issuer to pay interest periodically, and also repay the principal amount on maturity of the debt. It has been seen that bonds help in preservation of capital and give stable returns. However, it has an inverse relationship with interest rates i.e., if you own a bond, on the decrease in interest rates, the value of your bonds with increase and vice versa. Hence, it is advisable that you invest in short-term bonds, as they are less sensitive to fluctuations in interest rates, as compared to the long-term bonds. Also, you can ladder your portfolio of bonds to reduce the interest-rate risk and reap its benefits. However, investing in bonds can also be volatile at times, so conduct a thorough research before investing. Apart from this, you can also invest in Treasury Inflation-Protected Securities (TIPS), cash value life insurance, a new car, etc. You can also utilize the time of low interest rates by indulging in some philanthropic work. You can use the Charitable Lead Annuity Trust (CLAT) to donate money to charities. Non U.S. citizens may also be eligible for an offshore trust. The offshore fixed trusts offer a predetermined specific maturity, and can pay a higher rate of returns. Now that you know how to invest when interest rates are low, conduct extensive research on each of the investment options before you decide to put your money into it. It is advisable that you consult your investment adviser also. Not only verify the rate, amount of income or returns, but also check out the risk involved when pursuing a certain investment.