• Government bonds are considered a safe and secure investment since they are backed by the government, reducing the risk of default.
• They offer a reliable source of income for investors, particularly those seeking a stable and predictable return on their investment.
• Government bonds are highly liquid, meaning they can easily be bought or sold on the secondary market, providing investors with flexibility and access to their funds when needed.
• Some government bonds, such as U.S. Treasury bonds, are exempt from state and local taxes, providing tax advantages for investors.
• Government bonds can serve as a hedge against other investments in times of economic uncertainty or market volatility.
Government bonds do not pay very high interest rates. What advantages do they have for those who invest in them?
• The value will vary with the dollar's exchange rate.
• It is beneficial to invest money at a low interest rate.
• The money is guaranteed and will earn some interest.
• Businesses get tax credits for purchasing government bonds.
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