As far as choice goes, the federal government offers an array of bonds, treasuries, and other investment options to any US citizen. Of the bonds offered, the more commonly purchased are government bonds, t-bills, and i-bonds.
Government bonds considered the safest of the bond investments. These bonds are normally issued in terms of 30 years and pay interest every six months until they mature.
The cost can be whatever market rate demands. Thus the price can be any of three options; equal to the face value if the bond and market return are equal, higher if the bond offers a higher return than the market risk requires, or less if the bond is offering less than the market expects for the risk. When one feels their investments in the market are too risky and they are too venerable to a recession could always purchase these to help minimize such fears.
T-bills are another investment option the federal government sells. These bonds mature in one year or less, and are always sold at a discount from their face value. All profit from purchasing a t-bill comes from the difference in the face value and the actual cash amount paid for the t-bill. There are no interest payments on the t-bills.
I-bonds or inflation-indexed bonds, offer a way to help protect against inflation. These types of bonds are considered to be low-risk bonds. I-bonds protect the investor from inflation. Inflation indexed bonds comprise over $1.5 trillion of the international debt market.
Buying Government Bonds
To purchase any and all of these bonds, one does not even have to leave the comfort of one’s own home. Most purchases can be made from TreasuryDirect, which is commonly used by individuals purchasing government bonds. Other purchases of government bonds can be made through brokers and banks or directly through the Federal Reserve Banks.
By – Domenic Gabriella for GovernmentBond.com