Consider savings Bonds Before any other type of Investment

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Shopping for the most suitable investment product that meets your needs would be best. However, digesting opinions and advice from friends, family and financial specialists should be everyone’s springboard to investing, before making any investment decision. 

Savings bonds are a specific product type that we will explore for you in more detail today. 

Hopefully, by the end of this article, you will know more about how they work and whether they are the right choice for you. So let’s look at some of the positives of this type of investment product and how they can benefit you.

Dependable

The first reason you should consider savings bonds before any other type of investment is the product’s dependability. This type of investment has been around for decades in the United States.

President Roosevelt introduced the idea in 1935. They’re still one of the most popular vehicles for returns on your savings; they wouldn’t have been around for nearly 90 years if they weren’t dependable products that could withstand adverse economic conditions. It was a pioneering product, and not only is it still widely available today but the blueprint of some of Roosevelt’s policies is still being implemented nearly 100 years later.

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A savings bond is when you lend money to the central government via the Treasury, and they pay you back marginal gains over a standard lifespan of 30 years.

Currently, there are two types of savings bonds that you can invest in directly through the Treasury’s website. However, there have been other types of savings bonds that have been discontinued in the past. The two you will find today are Series EE bonds and Series I bonds.

No investment product comes without risk. However, a savings bond is arguably the most low-risk investment you can make – this is because they’re explicitly designed with inflationary and deflationary pressures factored in. 

Moreover, as they’re backed by the most stable and powerful government in the world, it’s doubtful that hyperinflation could hit the dollar or that political instability could render your bond worthless.

Less stress

This follows nicely from our previous point but if you invest in more volatile assets such as cryptocurrency or commodities, you will be aware of the heightened stress they can bring. 

The reactions to even the most minor bits of adverse news can hit your investment hard, and if you want a slow and steady investment where you can count up your smaller gains on an annual basis, then a savings bond is the product for you. 

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Suppose you’re an investor lucky enough to have considerable money behind you – in that case, a savings bond can help you secure this investment and receive these returns while negating the risks involved with investing. 

Working hard for your money is one thing, but working hard to keep hold of it and earn interest on it can involve an entirely different skill set. Removing emotions can help you make a better-informed decision, which is one of the main benefits.

Straightforward process

If investing in real estate, cryptocurrency, stocks or private businesses, you must weigh dozens of eventualities. With some of the fees involved, you can make a loss before you even enter the market. 

However, suppose you’re looking to invest in a savings bond. In that case, you can follow a relatively simple process and review the clear and concise information on the Treasury website. You can also discuss it with a financial professional who will be well versed in how the application works.

Investing in specialist products can provide a higher return. However, with so much groundwork and research required when investing in stocks and ETFs, it is easy to see why many people pick savings bonds due to their dependability and consistency.

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Conclusion

We aren’t here to give you investment advice, but hopefully, you can now see the benefits of investing in a savings bond. If your risk appetite is higher, it may not be your ideal choice. 

However, suppose you are looking to put your money into a reliable and solid long-term investment, and you’re not looking for one big home run. In that case, there are plenty of positives regarding savings bond investment. So long as you look after your health and allow the bond to mature, this could be a solid investment.

Since there are several positive factors, many financial professionals and investment experts will also double down on the importance of diversifying your portfolio. 

So, if you consider savings bonds a better type of investment than other options, remember that you can only have one per person, and the limit is $15,000. If you want to invest more money than that, looking at diversifying into other investment opportunities will give you a better idea of what to do with your hard-earned cash.