Home Contact Us Site Map Site Search Annuity Advantage Blog

About Us

Legal Info

Privacy Policy

Bonds and Short-Term Rates

Research and Compare Hundreds of CD-Type, Fixed and
Equity-Indexed Annuities Ranked by Highest Yield to Surrender
Questions? Give us a Call
1-800-239-0356
Annuities, Annuity Rates, Fixed Indexed Annuities and Annuity Quotes
CD-Type Annuities Fixed Annuities Equity-Indexed Annuities Annuity Search
Request an Immediate Income Annuity Quote
Chat Button
AnnuityAdvantage.com - Click For Review
Subscribe to our Free Annuity Rate Update Newsletter
Annuities Explained
Equity-Indexed Annuities Explained
Stock Market Growth With No Market Risk
Sell Your Annuity or Structured Settlement for Cash
IRA Qualified Annuities
Is Your Annuity Company Giving You The Best Deal?
What is a 1035 Exchange?
Free Annuity Exchange Evaluation Service
When Your Annuity Becomes a Tax Time-Bomb
Retirement Mistakes - Don't Let the IRS Take 20-30% of Your Company Retirement Account
When Your IRA Becomes a Tax Time-Bomb
Increase Bank Deposit Yields by 45%
Articles - Personal Financial Advice Arranged by Topic
Newsletters - Current and Archived Issues
Financial Calculators
Free Maturing CD Notification Service
Split-Funded Annuities
Life Expectancy Tables
State Guarantee Funds
Annuities of the Month


Delaware Life
Pinnacle MYGA 10

Ten Year Guaranteed
Interest Rate

3.65%
10 Year Surrender Term

A- (Excellent) Rating
from A.M. Best

Product Profile

Request More Information
 


Palladium Century 7

First Year Interest Rate
8.80%
10 Year Surrender Term

A (Excellent) Rating
from A.M. Best

Product Profile

Request More Information
 


Athene MaxRate 7

Seven Year Guaranteed
Interest Rate

3.00%
7 Year Surrender Term

Product Profile

Request More Information
 

 

 

 

Bonds and Short-Term Rates - Annuity Rates, Annuities, Annuity Quotes and Fixed Annuities
Bonds and Short-Term
Interest Rates

In recent years, interest rates have hovered near 40-year lows, easing the burden on borrowers and creating a flurry of activity in the refinancing industry. Because inflation has also remained low, the Federal Reserve has been able to maintain its accommodative stance toward the economy and keep target interest rates at bay.

But as the economy improves, many people believe that short-term interest rates will soon be on the rise. If this is the case, fixed-income investors may want to develop an investment plan that takes advantage of fluctuating yields.

Extend Your Reach
Bond laddering is one technique that helps investors shield their portfolios when interest rates are low and exposes them to greater growth potential when interest rates rise. This strategy involves splitting a bond investment to purchase several different bonds with varying maturities. For example, an investor might set up a ten-year bond ladder by buying five bonds that mature in two, four, six, eight, and ten years, respectively. When the first bond comes due after two years, the principal is used to purchase a new ten-year bond to keep the ladder going.

The result is that, during periods of low interest rates, only a portion of the investor's portfolio is committed to low-yielding bonds. And when interest rates rise, money becomes available to purchase new bonds with potentially higher yields.

Sell Wisely
Should an investor decide to sell a bond before it reaches maturity, rising interest rates can affect its value on the open market. Bond values generally move in the opposite direction of interest rates. For example, if you purchased a $1,000 bond that paid 5% interest (or $50 a year) and decided to sell it at a time when new bonds were offering 6% interest (or $60 a year), your bond would be worth less to a prospective buyer. This is especially true for longer-term bonds that lock in interest rates for longer periods of time.

Just as equity investors are subject to stock market whims, fixed-income investors may find themselves at the mercy of fluctuating interest rates. Keeping an eye on emerging trends may help you protect your portfolio and pursue growth despite volatility.

1) The principal value of bonds may fluctuate due to market conditions. If redeemed prior to maturity, bonds may be worth more or less than their original cost.

Bookmark and Share

Follow Us

First year yield/rate reflects fixed rate plus premium bonus or interest rate enhancement.
Interest is based on current rates and subject to change without notice.
Send email to webmaster@annuityadvantage.com with questions or comments about this web site.
Copyright 2001-2013 AnnuityAdvantage.com