![\"Investing](\"http:\/\/www.pacific-hydro.com\/wp-content\/uploads\/2022\/06\/savings-bonds.jpg\")
<\/p>\nAs retail investors diversify outside of an equities-only portfolio, many are looking at savings bonds as an opportunity to capitalize on rising interest rates. Historically, they are one of the oldest and most trusted investment products. They\u2019re backed by the full faith and credit of the United States government, and they offer investors options to both preserve and grow their wealth. They\u2019re widely considered a defensive investment and tend to rise in popularity as the stock market falls on hard times.<\/p>\n
Let\u2019s take a closer look at savings bonds: what they are, how they work as investment vehicles and how to best leverage them into a defensive portfolio. Plus, we\u2019ll look at the role of savings bonds within the context of a recession.<\/p>\n
<\/p>\n
A savings bond is a long-term depository investment made with the United States Treasury. They offer investors a guaranteed rate of return on their money, depending on how long they hold it. There are actually two types of savings bonds<\/a> investors can consider:<\/p>\n Savings bonds are the ultimate \u201cset it and forget it\u201d investments because, unlike other ones that pay interest and fluctuate based on the bond market, these investments are best held for the long-term. It\u2019s best to invest in them when your time horizon on realizing their gains is 20-30 years.<\/p>\n Series HH savings bonds were also available from 1980 through August 2004. These bonds had a maturity date<\/a> of 20 years and functioned similar to Series EE bonds, though they paid interest bi-annually. Investors who still hold Series HH bonds can continue to collect interest on them or cash them in at face value.<\/em><\/p>\n Savings bonds are one type of U.S. Treasury product<\/a>, alongside T-Bills, T-Notes, T-Bonds and Treasury Inflation-Protected Securities (TIPS). The key difference between savings bonds and other U.S. Treasuries is rate of maturity. T-Bills mature in less than 52 weeks. T-Notes mature in less than 10 years. T-Bonds mature in 20-30 years and pay interest, unlike savings bonds, which deliver ROI at the time of redemption.<\/p>\n It’s often simpler to think about savings bonds as deposits that earn interest, whereas other U.S. Treasuries are debt investment products. They work similarly to a savings account.<\/p>\n Given the option to put your money in savings bonds vs. a savings account (or even a debt investment), savings bonds offer some excellent benefits to consider<\/a>. Some of the primary reasons you might invest include:<\/p>\n Savings bonds offer interest-earning opportunities, combined with the flexibility to either let your money grow risk-free for 30 years or pull it out penalty-free after five years. They\u2019re also very accessible to any investor.<\/p>\n Many investors wonder how good a savings bond is as a defensive investment. It\u2019s a complex question because it really depends on the nature of the investor and their reason for investing.<\/p>\n For young investors, they aren\u2019t the best option because of their low interest rates. Those with a long time horizon can afford to invest in much more lucrative vehicles. This even includes defensive investments like commodities or other types of bonds. Conversely, those nearing or in retirement will find they are a very convenient investment. They offer the stability and reliability of a U.S.-backed bond, with the ability to cash in bonds if the interest rate environment changes.<\/p>\n Ultimately, savings bonds are typically better as instruments for wealth preservation, not generation.<\/p>\n<\/p>\n<\/div>\n \nEnter your email below to read the reveal for if savings bonds are a good investment. You\u2019ll also receive occasional special offers from Oxford Club and our affiliates. You can unsubscribe at any time. Privacy Policy<\/a> | Newsletter FAQ<\/a><\/p>\n $(“#LeadGen”).submit(function(e) { var options = { \/\/ validate email before doing anything else “); “); \/\/ hide iframe before adding src “); “); “); Nunc ut lorem quis urna auctor ornare quis in sem. Donec sodales viverra ante, et scelerisque libero iaculis sit amet. Phasellus fermentum vitae tellus quis suscipit. Ut bibendum aliquet odio, a venenatis augue fermentum at. Nunc fringilla dui lorem, congue blandit ex egestas in. 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Nam imperdiet, nibh nec mollis vulputate, felis ante posuere leo, at ultrices nulla neque vitae mi.<\/p>\n Integer blandit, diam et fringilla semper, nulla dui suscipit urna, eget hendrerit quam ex rutrum tellus. Nam imperdiet, nibh nec mollis vulputate, felis ante posuere leo, at ultrices nulla neque vitae mi.Nunc ut lorem quis urna auctor ornare quis in sem. Donec sodales viverra ante, et scelerisque libero iaculis sit amet. Phasellus fermentum vitae tellus quis suscipit. Ut bibendum aliquet odio, a venenatis augue fermentum at. Nunc fringilla dui lorem, congue blandit ex egestas in. Vestibulum dapibus orci ut felis consequat euismod. Sed pretium, risus vel blandit porttitor, diam diam sodales dui, in lobortis lorem ex vitae est. Nullam ac venenatis massa. Integer blandit, diam et fringilla semper, nulla dui suscipit urna, eget hendrerit quam ex rutrum tellus. Nam imperdiet, nibh nec mollis vulputate, felis ante posuere leo, at ultrices nulla neque vitae mi.<\/p>\n<\/p><\/div>\n If you\u2019re looking to hedge your portfolio and take a more defensive stance against oncoming economic hardship, savings bonds can provide stability. That said, they\u2019re better for those seeking very long-term defensive investments. Depending on the type of one you buy (Series EE vs. Series I), each has its own grouping of pros and cons. Nevertheless, either represents the safest possible investments you can make.<\/p>\n Looking for tips and other strategies to hedge your portfolio against economic hardship? Discover our family of investment newsletters<\/a> and take advantage of the expert advice of seasoned investors who know how to navigate the market in any conditions, including economic recession.<\/p>\n The post How do Savings Bonds Work as Defensive Investments?<\/a> appeared first on Investment U<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" As retail investors diversify outside of an equities-only portfolio, many are looking at savings bonds as an opportunity to capitalize on rising interest rates. Historically, they are one of the oldest and most trusted investment products. They\u2019re backed by the full faith and credit of the United States government, and they offer investors options to […]<\/p>\n","protected":false},"author":1,"featured_media":282,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-283","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bond-investing"],"_links":{"self":[{"href":"http:\/\/www.pacific-hydro.com\/index.php\/wp-json\/wp\/v2\/posts\/283","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.pacific-hydro.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.pacific-hydro.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.pacific-hydro.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.pacific-hydro.com\/index.php\/wp-json\/wp\/v2\/comments?post=283"}],"version-history":[{"count":2,"href":"http:\/\/www.pacific-hydro.com\/index.php\/wp-json\/wp\/v2\/posts\/283\/revisions"}],"predecessor-version":[{"id":307,"href":"http:\/\/www.pacific-hydro.com\/index.php\/wp-json\/wp\/v2\/posts\/283\/revisions\/307"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.pacific-hydro.com\/index.php\/wp-json\/wp\/v2\/media\/282"}],"wp:attachment":[{"href":"http:\/\/www.pacific-hydro.com\/index.php\/wp-json\/wp\/v2\/media?parent=283"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.pacific-hydro.com\/index.php\/wp-json\/wp\/v2\/categories?post=283"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.pacific-hydro.com\/index.php\/wp-json\/wp\/v2\/tags?post=283"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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Savings Bonds vs. Other Treasuries<\/h2>\n
The Major Benefits<\/h2>\n
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\nAre Savings Bonds Good Investments?<\/h2>\n
\nKeep Reading This Article and Find Out if Savings Bonds are Good Investments<\/h2>\n
\nYou\u2019ll also be opted in to receive our free daily e-letter, Investment U<\/i>, where you\u2019ll find expert investment insight, analysis and stock picks for all the best investment opportunities.<\/p>\n<\/div>\n<\/div>\n
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\n });<\/p><\/div>\n\nHow to Use Them in a Recession<\/h2>\n