Fixed Income GridAdvantages & Disadvantages | |||||||
Author’s Note: “Yes” or “No” means the very great majority of the item fits this description. Financial services providers turn out to be much more creative and flexible than we might think. And not always, IMPO – In My Professional Opinion – in the Best Interests of Clients! | |||||||
| CD | Savings | Bonds-Indiv | UIT indiv Bonds | Bond Funds | Money Market | G Fund |
|
| Account-FDIC | Laddered -Investment grade | Individual bonds laddered investment grade |
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| In Fed Employees TSP |
FDIC insured | Yes | Yes | No | No | No | Maybe | Government guaranteed |
Principal Safety | Yes | Yes | At maturity | At maturity | No | Often - in a narrow range | Yes |
Return of Principal | Yes | Yes | At maturity | At maturity | No | Usually | Yes |
Protected from market loss | Yes | Yes | At maturity | At maturity | No | Maybe | Yes |
Fixed interest rate | Yes | No | Yes | Yes | No | No | No |
Known before purchase | Yes | No | Yes | Yes | No | No | No |
Liquidity | At maturity | 100% | 100% | 100% | 100% | 100% | 100% |
Liquidity | At maturity with no penalty | Principal protected | Principal fluctuation before maturity | Principal fluctuation before maturity | Principal fluctuates daily | Principal fluctuates daily | Principal fluctuates daily |
Upside potential when held to maturity in addition to stated interest | No | No | No: At maturity | No | Yes | Typically small | Typically small |
Stable income | Yes | No | Yes | Yes | No | Yes | No |
Income known before purchase | Typically | No | Yes | Yes | No | Yes In typically narrow range | No |
Fixed Income Grid: Advantages & Disadvantages
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February 06, 2018