With a fixed 5% interest rate, you earn more money investing with Worthy Financial than you would by keeping your money in a bank. ... Worthy Bonds may not be as risky as many alternative investments because they invest in fully secured small business loans with assets and inventory-backing. Yet loan defaults can happen.
Recent Facebook advertisements have promoted Worthy Bonds as an investment that pays 5% interest. ... Worthy Bonds are not an outright scam or ponzi scheme. They are unrated and unsecured bonds in a company that makes business loans, with no evidence that the company will be around to pay back the bonds with interest.
Worthy bonds are not FDIC-insured (insured by the Federal Deposit Insurance Corporation). The FDIC is used to insure bank account deposits. Worthy is not a bank and its bonds carry no form of insurance. Worthy offers investments, and like any investment, investments from Worthy present risks.
The rule of thumb advisors have traditionally urged investors to use, in terms of the percentage of stocks an investor should have in their portfolio; this equation suggests, for example, that a 30-year-old would hold 70% in stocks, 30% in bonds, while a 60-year-old would have 40% in stocks, 60% in bonds.
​Historical returns on safe investments tend to fall in the 3% to 5% range but are currently much lower (0.0% to 1.0%) as they primarily depend on interest rates. When interest rates are low, safe investments deliver lower returns.
The Best Safe Investments For Your Money
An investment in Worthy Bonds is considered higher risk than keeping your money in an FDIC-insured online savings account or a CD. But the trade-off for taking on more risk is the higher return Worthy Bonds offer. Investments through Worthy can be safer than investing in the stock market.
More important, Worthy Bonds offers a decent rate of investment return. If you want to invest in small businesses but don't know where to start, Worthy Bonds is the right platform for you. ... Besides supporting small businesses and earning interest, you'll get a free service from Worthy Peer Capital.
Worthy Bonds is a legit and affordable way to earn fixed income. The 5% annual yield is better than the current savings account and bank CD interest. It can also be a good way to diversify your investment portfolio without relying only on the stock market to earn passive income.
Since Worthy Bonds are investments, you shouldn't use the service if you can't afford the risk of losing money. These bonds are not insured. While they state you can get your money out at any time, if the investment fails you could receive nothing.
MWHYX, FDHY, and HYDW are the best high-yield corporate bond funds. As compared with investment-grade bonds, high-yield corporate bonds offer higher interest rates because they have lower credit ratings. As treasury yields fall, high-yield bonds can seem increasingly attractive.
Seven best bond index funds to buy:
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