If youre looking for a safe investment that keeps your principal safe in any type of stock market environment, United States savings bonds could be a viable option for you. That is because these financial vehicles offer a set rate of interest that accrues monthly and compounds on a semi-annual basis.
There are different types of U.S. savings bonds. These include:
- Series EE Bonds
- Series I Bonds
Series EE savings bonds earn interest until they reach maturity in 30 years, or until they are cashed out whichever occurs first. These bonds earn a fixed interest rate, so your return will be known at the time you purchase.
Investors pay the bonds face value, which can be $25 or more. Up to $10,000 per calendar year may be purchased by investors, and they may be owned by individuals, as well as by trusts, estates, corporations, partnerships, and various other entities.
Series I savings bonds earn interest that is based on the combination of a fixed rate and an inflation rate. The fixed rate remains intact for the entire lifetime of the Series I bond. But the inflation rate is set two times per year.
This type of bond may be purchased electronically in any amount between $25 to $10,000 per calendar year, and/or via paper between $50 to $5,000 in a calendar year. (Both Series I Bonds and Series EE Bonds are available through https://treasurydirect.gov.
Are U.S. Savings Bonds Right for You?
Adding safe investments like U.S. savings bonds can provide your portfolio with a degree of safety in any type of market or economic environment. But these financial vehicles might not be right for everyone.
With that in mind, you should discuss your short- and long-term financial objectives with a retirement planning specialist.
