Savings Bonds

• By investing you immediately know what return you get if you retain the bonds till their redemption date.
• Interest on bonds is paid according to a predetermined payment schedule.
• The return fluctuations of investments in bonds are usually lower than those of investment funds or shares.

The bonds can be remunerated at fixed or variable rates. There are two interest payment options:

• at specified intervals throughout the duration of the bond;
• at the end of the bond period.

• Select sum of money to buy the bonds according to your investment objectives and financial resources.
• In some cases, the minimum number of the bonds available for purchase (for example, by investing in Eurobonds, foreign debt securities) is set.

• If necessary, you can sell the acquired bonds in the secondary market before their redemption date.
• The bond price in the secondary market depends on the current market interest rates, so there are opportunities to get return without holding the bonds until their expiry date.

• When you buy a bond, on the contrary to what many thinks, you have to fully assess risk of the company which is issuing the bonds, as if you buy the company's shares. As an exception the state bonds can be regarded, because the states go bankrupt much less frequently than the companies. In the secondary market, like in the case with the shares, bond prices (yields) depend on their liquidity, i.e. the opportunity to turn them into cash as soon as possible and at the lowest possible cost. The more liquid are the bonds, the more likely they can be marketed easier and without major losses.
• Bond price movements in the market depend on the time before their redemption. The bonds with longer time till redemption date are more sensitive to interest rate changes in the market. Having invested in longer-term bonds, you can earn or lose more if they are sold without waiting for the redemption date.