The Basics of
Bonds
Current Annual Percentage Rate Returns on Savings
Savings 1 Year Account Cd
2.5 Year CD
Money Market Mutual Fund*
H Bond
EE Savings Bond
I Bond
.75%
1.69% 2.8%
1.98% 1.5%
2.66% 4.66%
Types of Bonds
Government Municipality Corporation Mortgage Backed Securities Specialty Bonds
U.S. Government Bonds
Series EE Series I Series HH
Who are these people… And what denomination I Bond do they appear on???
U. S. Treasury Securities
Treasury Notes Treasury Bills
Municipal Bonds
General Obligation Revenue Bonds
Yield of Taxable and Tax-Exempt Investments
Sample Federal Tax Bracket 15% 28% 33% Taxable Investment Yield
4% 5% 6% 7%
4.7% 5.8% 7.0% 8.2%
5.6% 6.9% 8.3% 9.2%
6.0% 7.5% 9.0% 10.4%
Corporate Bonds
Risk/Reward Convertible Bonds Zero Coupon Bonds
Other Types of Bonds
Bond Mutual Funds Mortgage Backed Securities Collateralized Mortgage Obligations Unit Investment Trusts Annuities
Learning the Lingo
Interest Rate Maturity Redemption Features Call Provisions Puts Average Life Principal Payments Credit Quality Credit Rating Bond Insurance
Price Yield Market Fluctuations Tax Status Diversification Inflation Risk Laddering Volatility Bearer Bond Par
Are Bonds for YOU?
Your Goals Your Timeline Your Risk Tolerance
The first rule of becoming wealthy is not to lose money. The second rule is not to forget the first rule.
Warren Buffet