There are several investment options for individuals that are currently sitting on excess liquidity in their checking account and savings accounts. One of those options you may consider are fixed income solutions or bonds.
Here a few different bonds to consider:
- Callable: You're allowed to redeem these bonds prior to their date of maturity, usually for a fee paid to the owner.
- Corporate: These bonds are issued by companies the same as stock. They tend to offer a higher yield because they are not as safe as government bonds. Corporate bonds also pay taxable interest.
- Coupon: These investment vehicles are also called bearer bonds. Each coupon represents semiannual interest payments.
- Government: These bonds, known as U.S. Treasuries, are often considered to be the safest, which means they have a low yield. Interest earned is exempt from state and local tax. There are three kinds of Treasuries: bonds, notes and bills. Bonds have the longest maturity and bills have the shortest.
- Municipal bonds: These bonds are issued by state and local governments. The interest you earn is free from federal tax, and state and local tax may also be waived if you live in the state where the bond was issued. These are also low-risk investments.
For more information on effective wealth management strategies, contact Landmark Bank.
Investment products and services are not FDIC insured, not insured by any federal government agency, not a deposit or bank obligation, not financial institution guaranteed, subject to investment risk, including potential principal loss.
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