Smart Investment Interest: Where Does It Go?

Worthy Bonds is a popular investment option that offers a flat 7% interest rate. With no minimum investment term or maturity date, investors can redeem their bonds at any time. This flexibility, combined with the ability to withdraw interest earnings twice in a 30-day period, makes Worthy Bonds an attractive choice for those seeking easy access to their investments and returns. In this article, we will explore the key features of Worthy Bonds, including how they work, the benefits they offer, and the potential risks involved, to help you decide if they are the right investment choice for you.

How to withdraw interest earnings

If you have invested in Worthy Bonds, you can make a flat 7% interest by investing in business loans. You can withdraw your interest earnings twice in a 30-day period. After scheduling a withdrawal, Worthy deposits the original investment and uninvested interest into your bank account within four to six business days. You can sell bonds at any time penalty-free and fee-free with a $10 withdrawal minimum. To access your cash, you must sell the original investment or accumulate at least $10 in uninvested interest.

Each bond costs $10 and doesn’t have a minimum investment term or maturity date. Therefore, you can redeem your bonds when you need the cash for other priorities. Each bond earns 7% interest, although you receive daily interest payments.

Worthy Bonds lets you watch your money grow by choosing a length of time to hold your investment. You can choose your initial investment, whether it's $10, $1,000 or more.

The impact of market conditions on interest rates

The interest rate on Worthy Bonds is currently 7% and is paid daily. The rate can fluctuate depending on market conditions. For example, the platform increased the yield in 2024 from 6.5% to 7% as savings and loan rates rose.

Market conditions can also affect the demand for loans and investments, which in turn impacts interest rates. For example, when the economy is strong, businesses may seek more loans to expand their operations, leading to higher interest rates. Conversely, during economic downturns, businesses may be more cautious about taking on debt, resulting in lower interest rates.

It is worth noting that while interest rates are influenced by market conditions, they are also determined by other factors such as central bank policies, inflation rates, and the overall health of the economy. These factors can interact with market conditions to shape the interest rate environment.

Overall, market conditions play a significant role in shaping interest rates, and investors should consider these dynamics when making investment decisions. Understanding the relationship between market conditions and interest rates can help investors make informed choices about when to invest, how much to invest, and the types of investments to pursue.

How to sell bonds

Worthy Bonds lets you sell bonds at any time penalty-free and fee-free with a $10 withdrawal minimum. To access your cash, you must sell the original investment or accumulate at least $10 in uninvested interest. Each bond costs $10 and doesn’t have a minimum investment term or maturity date. Therefore, you can redeem your bonds when you need the cash for other priorities.

To sell your bonds, you will need to log into your Worthy Bonds account. From there, you can select the bonds you want to sell and choose the "Sell" option. You will then need to confirm the sale and provide your payment information. Once the sale is complete, the funds will be deposited into your bank account within four to six business days.

It is important to note that while you can sell your bonds at any time, you may not always receive the full value of your investment. The value of the bonds can fluctuate depending on market conditions, so there is a risk that you may lose money if you sell your bonds when the market is down.

Additionally, you can only withdraw your interest earnings twice in a 30-day period. After scheduling a withdrawal, Worthy will deposit the original investment and uninvested interest into your bank account.

The benefits of bonds over stocks

Bonds are a safer investment than stocks. This is because bonds represent debt, while stocks represent equity ownership. If a company goes bankrupt, debtholders (creditors) are ahead of shareholders in the line to be paid. In this worst-case scenario, creditors might get at least some of their money back, while shareholders might lose their entire investment.

Bonds are also useful for reducing volatility in a portfolio. They tend to rise and fall less dramatically than stocks, which means their prices may fluctuate less. Certain bonds can provide a level of income stability. Some bonds, such as U.S. Treasuries, can provide both stability and liquidity.

Bonds can also have higher yields than stocks as you are lending money directly to the company and can get paid back first before shareholders.

Bonds are not sold in central exchanges. Instead, they are sold over-the-counter (OTC), which means they are traded among individual brokers from buyers and sellers, instead of on a centralized platform. This makes bonds much more illiquid, and more difficult to buy and sell relative to stocks. Stocks are beneficial for investors who have a higher risk appetite.

How to get started with Worthy Bonds

Interest from Worthy Bonds can be withdrawn twice in a 30-day period. To access your cash, you must sell the original investment or accumulate at least $10 in uninvested interest. You can also automatically reinvest your interest.

To get started with Worthy Bonds, you will need your Social Security number and your bank's login information. You can then go to the Worthy website and select 'Get Started', entering your email address and password and agreeing to their terms and privacy policy. On the next screen, you will enter your personal information. You will then connect your bank account to fund your bond purchases. Bonds cost $10 each and you can start by buying just one. You can also schedule recurring weekly or monthly contributions in $10 increments.

Frequently asked questions