If you are looking for a safe savings plan, and aren't worried about having to access fast cash, accrual bonds may be a good investment for you. Accrual bonds have a fixed interest, but don't pay on that interest until the bond matures. Instead, the bond accrues interest through its lifetime and pays all of the interest in a lump sum at maturity. If you do cash them in early, you can lose the interest you have been building up.

Before you jump in and buy accrual bonds, make sure to do your homework first. Know exactly how much you can spend and how long you can wait until the bond matures. Before you purchase accrual bonds, make sure you:

1. Put yourself through accrual bonds training buy finding out whether to buy and what investment strategy they work best in.

2. Use an accrual bonds consultant to help you pick out the best bonds for you.

3. Use an online calculator to track your investment and find out how much you stand to gain from your investment.

Action Steps
The best contacts and resources to help you get it done

Diversify your retirement portfolio with accrual bonds

Accrual bonds are a great, safe investment for tax-exempt retirement accounts. They are a safe way to slowly make money, provided that you don't cash them about before they mature. Consult with a brokerage to get accrual bonds advice for your retirement accounts.

I recommend: Check out the individual retirement accounts available through Bank of America, TD Ameritrade or Fidelity. Their associates can give you the right mixture of accrual bonds and other investment strategies to help your account grow.

Get help with accrual bonds before you buy

An accrual bonds consultant can help point you in the right direction before you purchase your bonds. The U.S. treasury backs most types of accrual bonds and you can buy them through a brokerage. The basic costs for the bond should be the same but shop around for the brokerage with the lowest fees.

I recommend: Check out Wells Fargo or buy your accrual bond directly from the government from TreasuryDirect.

Use an online calculator to get accrual bonds information

An online calculator can help you assess whether you should buy accrual bonds. It can point out the advantages and disadvantages of accrual bonds in your portfolio.

I recommend: Key Bank has an accrual bond calculator to help you track your investment. Use the accrued interest calculator at FINRA to help you find out how much interest your bond has accrued. Also, RiskGrades is also a great site where you can plug in all of your investments, including accrual bonds, and assess how much risk you are taking.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Only use accrual bonds when you are sure you won't need to cash them out early -- such as saving for college or a down payment on a property. You don't want to lose interest by cashing them before they mature.
• •  Even though you won't get you interest from your accrual bonds until they have matured, the government taxes you on that interest while it is building. That's why accrual bonds work best in tax-deferred accounts like retirement accounts.