This Surprising Bond Investment Has Some Smart Benefits

If you're looking for an investment for retirement or other long-term goals, take a look at this old classic.

Dan Caplinger
Dan Caplinger and Lauren Anderson
May 15, 2013 at 10:01AM
Investment Planning

Retirement investors need to focus on growth in their investment portfolios, but it's also important to have some less volatile investments to reduce overall risk. Bonds used to fill that role quite nicely, yet with bonds having offered poor interest rates for years now, it's been hard for retirement investors to find the returns from bonds that they'd like to see.

In the following video, Motley Fool investment planning editor Lauren Kuczala talks with longtime Fool contributor and retirement expert Dan Caplinger about a surprising income investment option: savings bonds. As Dan notes, although most bond investments face the potential for dramatic falls in price if interest rates rise, savings bonds are guaranteed not to lose value regardless of what happens with rates. Moreover, with valuable features like inflation-tracking, certain types of savings bonds will help you preserve the purchasing power of your investment. Dan runs through what you need to know about savings bonds, including annual limits and other features that you should be aware of, before deciding whether to make them part of your overall retirement investing strategy.

This article was updated on April 30, 2015.