the interest paid on bonds issued by the united states government is less than the interest on many other forms of investment. Yet American citizens and people in other countries annually by billions of dollars in federal bonds. give reasons why many people choose this form of investment

Question

Alice Lyons

Business

25 December, 11:12

the interest paid on bonds issued by the united states government is less than the interest on many other forms of investment. Yet American citizens and people in other countries annually by billions of dollars in federal bonds. give reasons why many people choose this form of investment

+4

Answers (1)

Know the Answer?

Marsh · Answer 1

People invest in bonds for various benefits in them and one of them is that the income is predictable. Also the interest paid is semi annually in federal bonds. The principal amount along with the interest amount can be earned when the bond matures. The risk of this investment is very low and there is no major price fluctuations.

Here the interest on investment is a steady income for the investors. Some of the bonds offers tax exemption benefits which can be state and local taxes for the citizens. Also these are issued by the government and there are no fraudulent activities involved.