Apart from knowing “what is earnest money” in the previous article, you should have good knowledge on the savings bonds as well. You can purchase savings bonds in order to secure your future. The bonds have always been a good way of investment as they are completely secured and help to overcome a financial crisis. When you purchase savings bonds, you have to make a complete research on it so that you can pick up the one that is best in the market. Bonds can be of many types like: Government savings bonds, national savings bonds etc. Let us look in detail about these two:
Government savings bonds: If you are watching for a safe investment, then probably this is the place to invest. Government bonds have low risks and guaranteed income. You can earn with the interest rates put up by the bank on the principal amount you have deposited. Bonds can basically be classified into 2 types which are as follows:
- Series EE bonds: This type of bond involves very minimum risk and you can buy them with the help of a Treasury Direct account. The rate of interest depends on the current market condition. The bonds that were purchased after 2005 can earn an interest rate that is fixed whereas the bonds that were purchased between the years: 1997 (May) and 2005 (April) earns a varying interest.
- Series I bonds: Investing in this type of bond is termed as liquid investment as it protects you from inflation. You can earn a good income with such bonds. You can purchase them with the help of a Treasury Direct account. You can earn interest for about 30 years.
National savings bonds: Recently, the NS&I (National savings and Investments) had withdrew the index linked bonds and thus leaving plenty of potential investors to search for the savings bonds. The index linked bonds of NS&I was also known as RPI linked bonds and had a guaranteed income. It was completely free from tax with a five year fixed time duration. The bond became very popular and had a sale of 50000 in 4 short months. The index linked bonds is the only bond that offers total protection from the huge expenses and inflation. Even though the deal is no more there in the market today, experts are looking forward to some other bonds offered by NS&I in coming April. There is a big gap in the market today and there will definitely be tax incurred on the other bonds. In spite of the interest rates being low, the RPI linked bonds has a good position in the market today. The savers will always have to find for a better approach in the bond market so that they can survive when there is a financial crisis. Before investing, you will have to make a complete review on the current interest rates going on in the market. The potential investors who are looking forward in buying the index linked bonds have to be very careful or cautious about the interest rates of inflation. It is essential that you read down all the terms, policies and conditions of any investment plan before investing. Only when you have some idea about it, you can decide things properly in making money. You will also have to be very cautious about the fixed time so that your hard earned cash doesn’t gets locked by chance and you don’t end up in paying penalties for your own money. But there would be separate charges when you withdraw the cash before the time duration. Have a look at every minute thing connected to the bond.