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I am presently getting a 6% return on my savings in a high-interest account, calculated daily, paid monthly. I regard stocks as too risky for my 4 year savings plan but am interested in bonds as they may offer less risk than stocks but possibly more interest than I am presently getting.

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    where are you getting 6% in a savings account?
    – Mark Norgren
    Aug 17, 2010 at 14:48
  • Some credit unions or small banks offer something like 6% on a savings account, subject to a certain maximum. It's basically a small bribe to get you to bank with them.
    – user296
    Aug 17, 2010 at 14:58
  • I haven't seen any savings accounts offering more than 1.5% lately. 6% sounds too good to be true.
    – Ether
    Aug 17, 2010 at 17:29
  • virginmoney.com.au/savings
    – tfrb
    Aug 17, 2010 at 23:39
  • Mmm, Australia. It may have been useful to identify this. Note also that the inflation rate in Australia is 3.1%.
    – user296
    Aug 19, 2010 at 14:12

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You probably can get more than 6% out of bonds, but realize that bonds are risky and only bonds with significant risk would give you so much return.

Remember interest on bonds (and accounts and CDs) is payment for use of your money, and for risk.

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  • Yeah. That's a huge jump in risk between a savings account and bonds. Remember that bonds are also subject to interest rate risk (if rates go up after you buy the bond, and you sell it early, you'll lose money) and credit risk (the bondholder may just not pay)... Buying a bond fund diversifies you against the last of these, at least, but it's a lot of risk for a few extra percent.
    – user296
    Aug 17, 2010 at 15:03

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