Investing comes with lots of risk. But this lesser-known alternative could be great for people who aren’t ready for big risks, but still want to see their money grow.
Bonds – specifically “I bonds” – are a great investment! According to Investopedia, “I bonds are meant to give investors a return plus protection on their purchasing power.” Bonds in general are a pretty safe investment, but I bonds specifically come with nice perks.
The return rate on bonds is much better than a basic savings account. Currently, the average savings account has an interest rate of 0.06% – but I bonds have an interest rate of 7.12%!
So you’ll build wealth much faster with an I bond than your basic savings account. But I bonds are special in another way.
I bonds are protected from inflation. During periods of high inflation, investments like stocks can lose purchasing power. So as prices continue to rise, I bonds are a much safer place to invest.
I bonds are useful to people who don’t have a lot of money to invest, or just want to see their money grow without too much risk. We should seek out the investments that work for us – and this low-risk investment could be a great option!