"Unlocking the Potential: How High Yields Boost Bond Investments"

Despite not reaching the same levels as in 1994, rising interest rates have made fixed-income investments, such as bonds, more attractive compared to the ultralow rates of previous years. Bond investors can expect relief from disappointing returns in the years ahead, with short-term Treasury rates above 5 percent and investment-grade corporate bonds above 6 percent. However, rising rates can also increase the cost of borrowing for mortgages, credit cards, and car loans. Safer alternatives include money-market funds, bank certificates of deposit, and high-yield savings accounts. Buying Treasuries that you hold until maturity or investing in low-cost, diversified short-term bond funds are also options. While there may be uncertainties about the future direction of interest rates, the current environment presents a good time to buy bonds.