Does anyone know if government bonds and treasury bills are good investments?
December 7th, 2009 | by bonds |
GENERALE asked:
I am looking to invest in government bonds as an alternative to putting my money in a bank which offers a very limited amount of protection ($250,000 FDIC insurance limit). Which bonds are the best to invest in? Which bonds give the best returns and the most amount of protection? For instance, if I place $5,000,000 in government bonds, will my money be protected until the bond reaches maturity? I also was told that the money will be tax free if it is placed in government bonds, is this true? Any help from anyone would be greatly appreciated.
I am looking to invest in government bonds as an alternative to putting my money in a bank which offers a very limited amount of protection ($250,000 FDIC insurance limit). Which bonds are the best to invest in? Which bonds give the best returns and the most amount of protection? For instance, if I place $5,000,000 in government bonds, will my money be protected until the bond reaches maturity? I also was told that the money will be tax free if it is placed in government bonds, is this true? Any help from anyone would be greatly appreciated.
Thanks.
VAUGHN
2 Responses to “Does anyone know if government bonds and treasury bills are good investments?”
By Derek on Dec 9, 2009 | Reply
NATHANIAL
Yes your money would be protected, but putting $5,000,000, inflation would eat that money. You could invest some of it in bonds and some in income stock funds and get a much better return. Even an index fund.
By jeff410 on Dec 11, 2009 | Reply
JORDON
It is safe from default. You will get the principal back when the treasury matures and the interest payments are guaranteed. It is not tax free from federal taxes. But it is free from state taxes. You can buy them directly from the treasury at Normally longer maturities have better yields, longer yields are subject to interest rate risk. You might want to consider I-bonds for inflation.