This year saw the launch of Nationwide savings accounts targeted at business customers and a range of fixed rate bonds.
Leeds Building Society credited some of its success on the savings front to the popularity of its fixed rate bonds, which allowed customers unlimited access to a proportion of their money without penalty during the product's term.
The ones that do pay interest resemble ordinary fixed-rate bonds.
Underlying the rate worries, bonds -- whose fixed return makes them linked to interest rate and inflation expectations - also weakened.
The earnings rate for Series I Savings Bonds is a combination of a fixed rate, which applies for the life of the bond, and the semiannual inflation rate.
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Messrs Feldstein and Samwick also assume that retired folk will convert their personal retirement accounts into a variable-rate annuity, based on a combination of stocks and bonds, rather than a fixed-rate annuity.
Typically, buyers of perpetual bonds receive a fixed rate of return but expect the issuer to redeem the bond after several years.
Every six months your bonds are credited with the fixed rate plus the rate of inflation as determined by the Consumer Price Index for All Urban Consumers (CPI-U).
Things like that could be something as simple as non-traded real estate investment trusts, or secured floating-rate income, as opposed to fixed income or bonds.
Although the investments resembled bonds, paying buyers a fixed interest rate for taking on the default risk of corporate debt, the products invested in synthetic collateralized debt obligations held by Lehman.
Unlike traditional bonds, SIBs do not have a fixed rate of return as financial return depends on the achievement of specific social outcomes set at the start of the bond issue.
They resemble bonds in that their dividend rate is typically fixed, much like a bond coupon.
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Series I bonds consist of two components: a fixed interest rate return and an adjustable inflation-linked return, making them somewhat similar to TIPS. The fixed rate never changes, but the inflation return rate is adjusted every six months and can also be negative (which of course brings your total return down).
The fact that early bonds had no fixed maturity date ensured that any change in interest rate was fully reflected in the capital value of the bond.
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The county got the stability of a fixed rate, while paying Wall Street to assume the risk of the variable rates on its bonds.
If interest rates rise, active fixed-income investors could invest in short-term bonds, which tend to remain fairly stable in rising rate environments, or use floating rate funds, which are more insulated from the negative impact of rising rates.
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