Finding high interest rate bonds takes a bit of know how and understanding. Unlike simple money market, savings accounts or municipal accounts finding securities or high yield corporate accounts is a tad more involved.
Understanding what they are
Bonds are monies that you give to a company or government for them to spend with the idea that they will pay you back over time (maturity date) the sum borrowed as well as some interest rate. Most bonds are low yield loans and take several years to mature.
High yield bonds
It is the same concept. You are the investor who will loan money to a corporation to spend as they see fit, with the promise of repaying you the money loaned plus a higher than usual interest rate and at times over a shorter period of time.
With common bonds the risk is low. The chance of a Government going broke is slim though not impossible. However, high yield bonds or corporate bonds aver very risky as any monies paid in will not be paid out of there is a loss, shorter than anticipated yields or bankruptcies.
Advantages or disadvantages
Very minimal on the common bond market, your gains are low and take a long time (in some case
20-25 years to fully mature). On the other hand, corporate bonds offer the potential to double even triple your initial investment if you are patient and invested in the right corporate opportunity. Also, common bonds can be invested as low as $25 where corporate bonds or securities can reach into the thousands.
Where to buy them
Brokers The best and only recommended method of purchasing high yield corporate bonds or securities is through a licensed and experienced broker. It is a tricky business and knowing when to sell, hold or push the market a real professional is required. Do your homework on brokers and find one who fits your needs, trading desires and budget. There can be much at stake, so it is wise to be proactive. Last word Be wise, it is your money. The thought of parlaying a few thousand into tens of thousands is attractive to most everyone. The reality is those thousands can become hundreds just as easily.