There are many ways to invest your money. Some chose to simply put their money in a savings account, where very little interest is accumulated. Other choose to buy stocks , or mutual funds, which pay higher dividends but come with greater risks,. Another safer way to invest it to purchase government bonds.
A government bond is simply a debt fund. Investors purchase the bonds where the money is used to run the government or for other government programs. In turn the purchaser is entitled
to receiving a predetermined interest rate. A government bond is simply an IOU. They promise to pay the investor back with interest for a certain amount of years. This a safer way to invest your money with little or no risk at all.
Government bonds are secure, and never lose value. Bonds have a set
maturity date of 5 years, and never lose value. The purchaser receives interest payments every 6 months, which protects them from inflation issues. The interest rates are much greater then normal savings accounts but are not as great as many socks, and mutual funds. However the money is secure, and there is virtually no way you can lose on your investment. These bonds are a great way to add to you portfolio, to offset riskier investments.
Government bonds make great gifts for children. They also are a great way to share for long term projects, college expenses, or even to save for a vacation . Its is not a good idea to buy bonds if you feel you will need the money before 5 years. Any bond that is redeemed before the 5 year maturity date will be charged a fee, which offsets any possible interest you would have received. It's the only ways a bond can lose money.
Government bond funds are used for to finance government sponsored enterprises, military and war expenses, and other government programs. People who invest in bonds are not only helping their government but are also saving and growing their money safely. This is a great way to invest your money if you are new and don't want to high risks, such as purchasing stocks. Bond rates vary but never lose value, making it the safest form of investment on the free market.