Home > Fixed Rate Bonds

Fixed Rate Bonds

What Are Fixed Rate Bonds?

With all the options available for investing, it can be hard to decide what is right for your portfolio. While seasoned investors know that you need a mix of various stocks, bonds, cash, and other investments, new or conservative investors can get sidetracked by the amount of options available, especially within the bond market. If your risk tolerance is too low for stocks or bond funds, you might want to consider fixed rate bonds. What Are Fixed Rate Bonds? A fixed rate bond is exactly what it sounds like. It is a note that is secured by a bank or government that carries a guaranteed rate of interest if the bond is held for the specified maturity period. Maturity periods can vary, but generally the shortest available period is one year. As such, it is not subject to fluctuations in interest rates. You will not lose money on bonds if you hold them until maturity because the interest rate is stable. This can certainly appeal to conservative investors or retired individuals who can’t risk losing principal from their portfolio. However in today’s arena of low interest rates, bonds can actually lose money due to inflation. One way around this is ...

Read More »