Fixed Income Securities
Enjoy the ability to preserve your assets while growing your income with Fixed Income Securities.
- Fast Facts
- Offers steady source of income
- Enjoy flexible terms + payouts
- Range of liquidity options
If you’re looking for relatively secure investments with consistent returns, Fixed Income Securities may be your answer. Some of these investments are backed by the U.S. government or related government agencies, provide guaranteed income options, and come in a variety of short to long-term maturities to fit your needs.
Fixed Income Securities Offer You
- Guaranteed rate of return (when held to maturity)
- Flexible interest payment options
- The security of knowing your payments in advance
- Short, medium, and long-term maturities
Fixed Income Securities include:
Fixed Income Treasury Securities
Backed by the full faith and credit of the U.S. government, Treasury Securities offer guaranteed rates of return when held to maturity and can provide a steady stream of monthly or quarterly income.
Often referred to as a T-bill, these short-term securities offer maturities of 3 months, 6 months, and 1 year. T-bills are sold at a discounted face value and upon maturity pays out the full face value amount.
Treasury Notes and Bonds
Typically issued and redeemed at face value, these securities pay out a fixed rate of interest every 6 months until they mature. Notes offer intermediate to long-term maturities between 2 to 10 years and bonds offer maturities of 10 years or more.
Fixed Income Agency Securities
In addition to the U.S. Treasury, federal agencies also issue short- and medium-term securities. These investments are not considered direct obligations of the United States but most often offer government guarantees or sponsorship and a higher rate of return than Treasuries of comparable term lengths.
Agency Discount Notes
Like Treasury Bills, Agency Discount Notes are sold below face value and mature to face value in short-term intervals.
Agency Medium-Term Notes
These are comparable to Treasury Notes, as they’re offered for fixed periods of time and pay interest semi-annually.
Issuing Federal Agencies include:
Federal National Mortgage Association (FNMA)
Federal Home Loan Mortgage Corporation (FHLMC)
Federal Farm Credit Bureau (FFCB)
Federal Home Loan Bank (FHLB)
Corporate Bonds (Corporates) are debt obligations issued by public or private corporations. Companies use the funds they raise from selling bonds for a variety of purposes such as building facilities, purchasing equipment or expanding their business. Yields will vary on Corporates based on the credit quality of the issuing corporation. The higher the credit quality (and perceived lower risk), the lower the yield will be. Corporate Bonds usually pay a fixed rate of return monthly, quarterly or semi-annually. Interest earned on Corporate Bonds is fully taxable.
The market value of corporate bonds will fluctuate, and if the bond is sold prior to maturity, the investor's yield may differ from the advertised yield.
Commonly referred to as “munis”, these bonds are issued by states, cities, counties and other government entities to fund public projects such as the building of schools or highways.
Municipal bonds are a low-risk and secure investment with a variety of maturity options and bond types depending on your geographic location. They also offer the added benefit of possible exemptions on federal and in some cases state and local income taxes. But they may be subject to alternative minimum taxes.
Municipal bonds are subject to availability and change in price. They are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.
Keep in Mind
- Both Treasury and Agency Securities are not bank deposits, and do not qualify for FDIC insurance
- Principal value is not only subject to risk when sold before maturity date but also market fluctuations
- Government bonds and Treasury bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value
Need personalized investment advice? Have a Financial Consultant contact me.
To learn more about Fixed Income Securities, please call us at 1-888-493-2783, option 4 or visit a Webster branch near you.
Securities and Insurance Products:
|Not FDIC Insured||Not Bank Guaranteed||May Lose Value|
|Not a Bank Deposit||Not Insured by any Federal Government Agency|
Securities offered through LPL Financial, member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates. Webster Bank, N.A. and Webster Investments are not registered broker/dealers and are not affiliated with LPL Financial.
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