Those who are ready to retire and want stable and reliable cash flow, usually turn to bond funds. Bond funds are here to give your portfolio some boost and they’re usually long-term investments.
Today, we’re going to go over some low-risk bond funds that can provide you with that constant cash flow.
Table of Contents
Best Low-Risk Bond Funds
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Savings Bonds
If you want low-risk-low-reward, yet safe investments, savings bonds are your best bet. They’re backed by the government and as such, they will never lose principal. You won’t be able to make a ton of cash, as they don’t come with mind-boggling yields. With savings bonds, this is the point. You want to keep your cash flow constant, safe, and relatively modest. Furthermore, saving bonds are tax-free and really easy to buy.
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Banking Instruments
Bank saving accounts and certificates of deposit are some of the safest options out there. But, you still need to keep an eye on two factors. First, you want to make sure that the institution is FDIC-insured and of course, that your total account is below the FDIC insurance maximum. When everything’s into place, banking instruments will provide stable revenue but won’t make you rich.
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Treasury Bills
Treasury bills represent short-term bonds, with the maturity time of one year or less, from the time of issuance. These are sold with maturities of 13, 26, and 52 weeks, making them low-risk. Given their short maturity time, these bills offer lower yields but also significantly lower risk. Practically, they’re risk-free, as investors don’t have to worry about the government defaulting in the next year.
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Stable Value Funds
As its name implies, stable value funds are a type of investment plan found in retirement programs. Basically, stable value funds are insurance products where the insurance company or a bank guarantee the return of principal and interest. They’re well-known for their liquidity, steady growth, and liquidity.
Source: https://www.thebalance.com/lowest-risk-bonds-what-types-of-bonds-are-the-safest-417025
