Fixed rate savings bonds are a very risk free investment option that many people are looking into. As the name implies, these are bonds that pay the same rate regardless of the current interest rate. They are best if you have searched the stock market and cannot find any good stocks worth buying. Obviously the return on investment for a fixed rate bond is not as good as they can be with stocks, but the risk is also much lower as well.
Just keep in mind that these bonds require that you pay in a large amount upfront amount (the lump sum), so you need a reasonable amount of savings. The good thing about them is that they generally offer around a 5 interest rate, which is more than the 3 the majority of savings accounts have. Also, this is guaranteed to stay this way until maturity, because it does fluctuate with the current interest rates the way a savings account or non-fixed rate bond does. With these bonds, you can decide on getting the payments either once a month, once or twice a year, simply upon maturity.
However, there is one major negative to these bonds, and that is that they are not as liquid as most savings accounts. This is because in many instances there are withdrawal charges for taking money out prior to maturity. For this reason, you might want to consider a bond fund, as they tend to be more liquid than individual bonds. These funds are excellent, because you do not have to waste time looking for the best funds yourself, and you can just rely on the fund to go out and find them for you. The bottom line is, fixed rate savings bonds do not have as good of an interest rate as an investment grade corporate bond, but they are also less risky.
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