Why You Should Add Government Bonds to Your Portfolio

You can get your savings bonds replaced by writing to the The Bureau of Public Debt. Jason Raff/Shutterstock

One way to protect your investments from the fluctuations in the market is to invest in government bonds.

These financial instruments—also referred to as treasury direct bonds or Treasury securities—can help stabilize your investment money and balance your portfolio because they are backed by the credit of the U.S. government. There are several types of government bonds to choose from, which enable you to pick the one that is right for your needs.

Types of Government Bonds

Before buying any government bonds, you need to look at what you want to do with your portfolio. The many types of government bonds give you considerable flexibility in maturity dates. All of them offer lower interest rates than corporate bonds, but the returns, while smaller, are virtually guaranteed.