What fixed income investment pays best?

Answer 1

the higher the risk the greater the payout on fixed income investments, with a few exceptions. For example t-bills among the very safest of investments pay about 5%. Yet 10 year U S government notes pay only 4.6%. They are not nearly so safe as t-bill yet they pay less.

Climbing up the risk scale and therefore inceasing the payout, we come next to investment grade government bonds of short term issued by U S and foreign governments. Payout about 5.15% as indicated by MIN a closed end fund investing in those securities.

Next comes corporate bonds of overall investment grade. Current payout 6.96% as indicated by GFY a closed end fund invesing in those securities.

Next come junk bonds of less than investment grade. Surprisingly these do not yield as much as their risk would indicate that they should. That is probably due to the fact that investors are willing to pay more to receive a little more income. Perhaps not very smart on their part. Current payout about 9.19% as indicated by PHK a closed end fund investing in junk bonds although the yields vary greatly depending on the relative quality of the junk.

Answer 2

Great answer Muncie Birder. Most retirees need to alter their investments in order to turn their savings into an income.

While bonds are a fixed income option, this does not mean that it is the best option. If you invest in a diversified, low-risk portfolio that is a mix of bonds and dividend paying stocks, the combination would creat an excellent fixed income investment. With this strategy, you could expect to return over 8% per year (over a 5 or 10 year period).

Also, if you don't withdraw more than 6% per year, your money will last forever!

Answer 3

Here is a list of very high paying fixed income investments http://bond-yields.com/

Answer 4

I saw a sign the other day in my city (Adelaide, Australia) for a bank, a savings account with 8 point something percent interest over 6 months. Minimum investment was about $20,000 though.

Answer 5

It depends on what you mean by "pays best." If you mean the safest type of investment, that would be treasury (T) bills. If you mean highest rate of return (but also highest chance of losing your money), then it could be junk bonds or stocks. The best way to go is to give your money to an investment banker and have them invest it for you... that's what they get paid to do.

Answer 6

The higher paying in interest is the higher risk, so the answer would be Junk Bonds.

Treasury bills, CDs, savings bonds have zero risk, but lower interest rates.

Municipal bonds, A-rated company bonds pay a slightly higher interest rate for a lower risk.

Answer 7

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Answer 8

T Bills

Answer 9

Indexed Annuities allow the annuitant to invest in securities.

Answer 10

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