Fixed Income Investments

Fixed income investments are a form of investments that is relatively safe and important in today’s difficult economic times. It refers to an investment that generates an average amount of return. They are the best solution for people seeking to invest money which does not involve risks. Fixed income investments include investments like mutual funds, bank notes, government bonds, retirement investments etc. Some of the common types of fixed investments are Certificate Of Deposit, bonds and bond fund.


Certificate Of Deposit is the safest type of fixed income investment. Since these investments are insured by the Federal Deposit Insurance Corporation they are free from risks. Though it does not offer you high returns but your income is protected. Whenever you buy a Certificate of deposit you wait for a certain period of time until it has matured before you withdraw the initial principal along with an interest gain. If you need your money to be safe it is important to get yourself educated about the Certificate of deposit.


Many financial advisors suggest Certificate of deposit since they can save you a lot of money. They can be purchased from a bank, brokerage firm or any loan institution. While purchasing it you would require to set aside some amount of your money with the bank for a specific period of time. The financial institution will then pay you the interest generated on that amount of money. Once it matures, you will get the initial money back along with some profit.


Bonds are another type of fixed income investments where the holder needs to loan a certain amount of money to the issuer. The issuer can be a company or the government. Bonds involve a lot of risks and are not considered to be completely safe. While there are some bonds that provide you with low risks like the U.S treasury bonds that are considered to be the safest among the other bonds.


Other bonds like the savings bond have a fixed interest rates and can earn interests till 30 years. It is possible to cash them after a period of one year and if it is redeemed before 5 years you will have to pay a penalty for 3 months interest. A savings bond is of two types namely the Series EE Patriot Bond and the I-Bond.


Bond fund is a type of fixed income investment that provides a higher income. These funds can be mutual funds or exchange traded funds. They are best for average investors who can invest in the bonds with bond funds and reap benefits. Many people prefer bond funds since they are easy to invest and pay higher interest. But investing in the bond fund comes with a risk involved with the interest rates. Since there is a fluctuation of interest rates on bonds it is risky to invest in bond funds.


Fixed income investments are useful to preserve your money while you maintain your level of income. You must consult your financial advisor to explore many other options of fixed investments.

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