StreetShares Veteran Bonds: How I Earn 5% On My Cash
This post may have affiliate links for StreetShares Veteran Bonds. Sales made through such links may result in a commission (at NO extra cost for you) but be assured I only mention products that I truly love, love, love.
On social media, one thing I constantly see people posting about is how to find the best interest rate for their savings or emergency accounts. People are constantly comparing different “high-yield” savings accounts or CD products. If you find a product with close to 2% APR, good for you, that’s not bad. However, I haven’t even been messing with those products any longer since I started investing with StreetShares Veteran Bonds, where I earn a 5% annual return.
(Yeah I said 5%).
No, I’m not saying dump your entire life savings, investments, or TSP into StreetShares so that you can earn 5%. For my sake and yours, I hope our market returns will be much higher than 5% in the long run. However, if you’re saving for a short to mid-term goal, (down-payments, new vehicle, emergency funds) and you want to avoid market volatility but you also want to earn decent interest, consider StreetShares Veteran Bonds.
Notice I said, ‘avoid market volatility”. Market volatility isn’t just big dips in the market, it’s a swing in either direction, up or down. By not keeping these funds directly in the market, I’m avoiding possible losses when the market dips, but I’m also avoiding possible high returns. There’s something else I’m missing out on too. Dividends. I like to invest with divided-earning stocks and mutual funds. However, I’m trading in those possible market benefits for a stable 5% interest rate on some funds that I want to hold close to me for the next year, but not so close that it’s just sitting in a savings account doing nothing.
- Earn a consistent 5% annual return on your money
- Start investing with a very low threshold, just $25 minimum to get started
- Relatively liquid investments; hold your investment for 1 year to receive the full 5% interest or withdraw as needed during the course of the bond for a 1% fee.
- Easily set-up a StreetShares account online in just five minutes – view, access, and manage your investments 24/7
StreetShares is a veteran-owned corporation, founded by Mark L. Rockefeller and Mickey Konson, incorporated in 2013. It’s an online marketplace that provides loans to veteran-owned and main street small business. If you’re looking to step into social impact investing, this is a great place to start. Their investment products support American small business owners all across the country. By purchasing Veteran Business Bonds, StreeShares is able to offer loans, lines of credit, and contract financing options to American entrepreneurs. In January 2018, StreetShares closed its Series B Round of funding, raising over $23 million in equity capital.
I know what a bond is, but tell me again
Bonds come in a few flavors but basically, they are a type of investment that can be thought of as a loan. The investor loans money to the issuer (companies, municipalities, governments) for a set period of time. In exchange for holding their money, the investor expects to receive a fixed or variable interest rate plus their original principal (the money they loaned the issuer) at the maturity date of the bond.
StreetShares Veteran Bonds are actually three-year notes. There’s not a lot of difference between notes and bonds, mainly how long they take to mature (notes are usually shorter). For their current offering, you can earn 5% annual interest, accrued daily on your StreetShares Veteran Bonds. StreetShares uses your investments in Veteran Bonds to back their portfolio of loans to Veteran and main street businesses across the United States. Veteran Bonds are not Peer 2 Peer (P2P) loans, or crowdfunding, they represent a full and unconditional obligation of StreetShares.
Minimum Buy-in
It’s easy to sign-up with StreetShares and open your account online. You can purchase Veteran Business Bonds in increments of $25, starting at $25. Side note: that is a super low initial investment rate. Other investment options such as high-interest savings accounts, CDs, and traditional bonds often have a much higher initial investment or require that you hold a large daily balance sometimes as high as $10,000.
Rate of Return
Veteran Bonds earn 5% interest annually. The interest rate is fixed and is accrued daily to your account.
Holding Period
To earn your full 5% interest on each deposit hold your money in your StreetShares account for one full year.
Withdraw Period
The date you deposited your first investment is your “anniversary date” as an investor with SteetShares. Each year for a two-week period starting on your anniversary date, you can withdraw any or all of your investments without fees.
As an example, my anniversary date is in November each year. Initially, I deposited $1,000 last November. After one year, I can take it out along with my 5%. However, in about May of this year, I also made an additional deposit. I can take that money out too during my anniversary date in November. Even though it hasn’t sat in my account for a year yet, I can still take it out, but I wouldn’t earn my full 5% on the additional investment I made.
Fees
There are no management fees for Veteran Bonds. Ever. However, a 1% fee is applied if funds are withdrawn outside of your 2-week anniversary period.
Withdraw Strategy
I opened up a StreetShares Veteran Bond account in my name with an initial deposit of $1,000 to test it out. After a few months and deciding that I was happy with StreetShares, I made a larger deposit. Regardless of when I make more deposits my investor anniversary date is still November each year. After we sold our house, my husband and I had a nice chunk of change from the sale. I was just about to dump it in my StreetShares account when I realized that if we opened an account in my husband’s name, we’d have another investor anniversary each year to make withdraws if we wanted.
So we opened a second StreetShares account, this time in my husband’s name. Now we have two points in the year to withdraw our funds if we choose to. Periodically, StreetShares also offers promotions where they will give you a cash bonus for making deposits. With two accounts we can double our bonuses. So far in 2018, we’ve earned $1,000 in deposit bonuses.
What’s the risk?
Veteran Business Bonds are still a security and like any security, there is always still a risk. However, StreetShares minimizes risk on their Veteran Bonds through several methods. Just so you know, StreetShare Veteran bonds are not FDIC insured like your savings account, for example. Although it may or may not put you to sleep, reading an investment’s offering statement is always a good idea before you make any investments of any kind. You can find the Veteran Bond Offering Statement here.
- Keeping a diversified portfolio of loans, issued by an experienced underwriting team.
- Default risk for individual loans is not carried through to Veteran Bonds. So if a business fails, you’ll still earn your 5% regardless of how someone else performs on their business loan.
- StreetShares maintains a provisional fund equal to its annual estimated losses to offset potential defaults.
In addition, StreetShares’ successful B Round Funding in January 2018 (raised over $23 million) gives me the warm fuzzies. You can think of successful Series B funding rounds as something that companies who are fully operational and past the early stages of project development and getting their feet wet. Series B is for “Building” and these companies are on their way up.
Make an Impact
When you invest with StreetShares Veteran Bonds, you are directly impacting veteran and military spouse-owned small businesses and even some main street American small businesses too. StreetShares knows that the military community makes great entrepreneurs who are dedicated and resilient. Thousands of investors are already getting their 5% returns with StreetShares Veteran Bonds. Click here to use my affiliate link to become a StreetShares member and start investing Veteran Bonds today.
