The chart below gives you a quick, convenient way to compare the benefits of various fixed-income products. In general, bonds and bond funds offer more income potential than money market funds and CDs, but also carry a greater risk of principal loss.
|Bond Funds||Individual Bonds||Money Market Funds||CDs|
|Income Potential||Dividends paid at pre-determined intervals in variable amounts||Periodic payments at fixed amounts||Dividends paid at pre-determined intervals in variable amounts||Fixed payment usually at maturity; interest crediting and compounding during term can increase income potential|
|Capital Growth Potential||Potential for capital appreciation||Potential for capital appreciation||None||None|
|Flexibility||Buy or sell daily at current NAV; checkwriting available on certain
T. Rowe Price bond funds
|Buy or sell at any time on secondary market at current market value||Buy or sell daily; checkwriting available on all
T. Rowe Price money market funds
|CDs opened directly with a bank may impose penalty for early withdrawal; CDs purchased on secondary market offer opportunity to sell at current market value without penalty|
|Stability||Principal value will fluctuate||Principal value will fluctuate prior to maturity; principal returned at maturity; subject to credit worthiness of issuer||Principal value typically stable||Principal returned at maturity and covered to FDIC insurance limits2|
|Fees or Expense Ratio/Minimums
commissions and fees apply
|No fees for most CD accounts opened directly with a bank; commissions and fees may apply for CDs purchased through brokerage account|
|Investment Minimums||$2,500-$25,000 minimum1||Generally $1,000 minimums; $5,000 for municipal securities||$2,500-$25,000 minimum1||Generally $1,000 minimum|
Protection, such as FDIC or SIPC insurance, largely depends on where you hold your assets. The chart below shows you what types of assets are insured based on where they are purchased.
|Purchased directly from
T. Rowe Price
|Purchased through a T. Rowe Price Brokerage account|
|Money Funds||Individual Bonds||Bond
1 Investment minimums and expense ratio ranges are for. T. Rowe Price funds. Expense ratios are as of each fund's fiscal year end and will vary over time.
2 The Federal Deposit Insurance Corporation (FDIC) basic deposit insurance coverage is $250,000 per depositor. Please note that there is separate $250,000 coverage per depositor for certain retirement accounts (like Traditional and Roth IRAs).
3 Brokerage accounts are covered by SIPC, which protects security customers of its members for up to $500,000 (limit of $250,000 for cash claims).
Money Market Funds
Retail Funds: You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. Beginning October 14, 2016, the Fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund's liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund's sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.
Government Funds: You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund's sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.