While mutual funds don’t completely take away risk, you can use them to hedge against risk from other investments. Are there any Guarantees? To lower default risk, investors can select high-quality bonds from reputable large companies, or buy funds that invest in these bonds. Cookie Policy Bankrate uses cookies to ensure that you get the best experience on our website. The FDIC insures deposits only. In general, as investment risks rise, investors seek higher returns to compensate themselves for taking such risks. Department of the Treasury, which operates TreasuryDirect.