Many investors are familiar with stocks but may be less familiar with the variety of fixed-income investments that can play a role in a diversified retirement portfolio.
Fixed-income investments encompass a variety of financial products, including government and corporate bonds, annuities, certificates of deposits (usually called CDs) and high-yield savings accounts. Depending on the investment, they may provide periodic interest payments at either fixed or variable rates. Fixed-income investments can help diversify a portfolio and manage risk. Each type of fixed-income investment has specific features that may benefit investors based on their personal investment needs and goals.
This article aims to provide readers with an overview of fixed-income investments, including the advantages and disadvantages of each type.
What are some different types of fixed-income investments?
Government Bonds and Notes are debt securities issued by the federal government, states or municipalities to finance their spending. US Treasury bonds or notes are generally considered to have low credit risk because they are backed by the full faith and credit of the United States. These securities offer regular interest payments with a promise to return the principal at maturity. They are widely used by risk-averse investors looking for stability, but as a result, pay lower interest rates than other fixed-income investments, particularly corporate bonds.
Corporate bonds and notes, such as the Phoenix Energy Bonds and notes, are among the largest components of the U.S. bond market. They are a type of debt security structured to deliver interest payments during the bond's term (or life), with principal repaid at maturity. Corporate bonds are issued by companies to raise capital for business activities, including expansion and development. They generally offer higher interest rates to compensate for the increased risk of lending to a corporation as compared to the federal government. The risk level of corporate bonds can vary based on the issuing company’s financial health, but readers can review the company’s financials and applicable offering documents to better understand the financial resources of the issuing company and its ability to meet its debt obligations.
Certificates of deposit (CDs) are time deposits offered by banks and credit unions that usually pay a fixed interest rate for a specified term. They are usually sold in maturities ranging from 28 days to 5 years, and withdrawing (or redeeming) before the maturity date typically involves paying some kind of penalty or redemption fee. They are considered very safe in terms of risk of default, as they are usually insured by the Federal Deposit Insurance Corporation (FDIC) up to a certain limit (i.e., $250,000); however, they are subject to other risks, including interest rate and inflationary risks (as the interest rate is lower and could be outpaced by inflation) and are often purchased by conservative investors who want to lock in a fixed rate of return for a set period.
Annuities are often considered one of the more complicated fixed-income instruments available to investors. In its simplest form, an annuity is a contract between an investor and an insurance company and requires the insurance company issuer to make regular payments for more than one year. However, annuities come in many forms, including fixed, variable, and indexed, and can be purchased with a single payment or a series of payments (called premiums). Understanding the fees, expenses, charges, and features of an annuity can be complicated, and understanding the tax implications is imperative for any investor to understand before purchasing an annuity. Like any investment, whether an annuity is right for an investor depends on the investor’s financial situation, age, health, and goals. Annuities can be right for some people and wrong for others.
High-Yield Savings Accounts are deposit accounts offered by banks and credit unions that generally pay higher interest rates than traditional savings accounts. Like standard savings accounts, they allow account holders to earn interest while maintaining access to their funds, making them a common choice for emergency savings or short-term financial goals. Most high-yield savings accounts are insured by the Federal Deposit Insurance Corporation (FDIC), or the National Credit Union Administration (NCUA) for credit unions, up to applicable coverage limits. While they offer liquidity and a relatively low level of risk, returns may not keep pace with inflation over extended periods.
What are some advantages of fixed-income investments?
Fixed-income investments are considered to have several advantages for investors, depending on the needs of the particular investor, including:
- Providing a steady income stream at a fixed rate of return during the term of the investment, compared to unknown returns associated with equity-based investments.
- For investors who hold a fixed-income investment to maturity, the expected return is generally based on the contractual interest payments and, if the issuer performs its obligations, repayment of principal at maturity, rather than appreciation in the market value of the investment. This structure may be attractive to investors who have less flexibility to buy and sell investments based on short-term market movements
- For corporate debt securities, bondholders generally have a higher priority of repayment than equity holders if the issuer becomes insolvent or enters bankruptcy, although recovery is not guaranteed.
- Some are considered very safe and with virtually no default risk, including government bonds and FDIC-insured CDs; however, the reduced default risk generally comes with lower interest rates than those offered by corporate bonds.
What are some disadvantages of fixed-income investments?
Fixed-income investments are considered to have several disadvantages for investors as compared to other types of investments, including:
- Returns have often been lower than those of equity investments over long periods, although the risks and potential returns vary depending on the type of fixed-income investment.
- An increased credit and default exposure, depending on the issuer of the debt security.
- Interest rate risk if interest rates rise during the term of the fixed income security and the investor could miss out on getting a higher return for a period of time.
- Inflationary risk as the rate of inflation eats into the returns the investor would otherwise receive.
How do Phoenix Energy’s fixed-income corporate bonds and notes work?
Phoenix Energy is an oil and gas company focused on drilling operations in the Williston Basin. Phoenix Energy’s corporate bonds offer fixed annual interest rates ranging from 9 to 13% and with maturities from one to eleven years, depending on the offering. Phoenix Flex Notes offer fixed annual interest rates ranging from 6.00% to 7.00%. Investors may choose from five Set Put Intervals—three, six, nine, twelve, or eighteen months—that correspond to scheduled opportunities to request redemption in accordance with the applicable offering documents..
Individuals seeking additional information can attend an informational webinar and can go to the phxoffering.com to find offering documents for Phoenix's various offerings.
Evaluating Corporate Bonds and Notes Like Phoenix Energy
When evaluating a corporate bond or note, it's important to understand the business behind the investment. Unlike government bonds, corporate bonds are backed by the financial strength and operations of the issuing company. That means investors should look beyond the stated annual interest rate and consider how the company generates revenue, manages risk, and intends to meet its financial obligations.
Different industries have different business models and risks. For example, a real estate company may depend on factors such as property values, occupancy rates, rental income, and financing costs. A manufacturing company may be influenced by supply chains and consumer demand. Understanding the underlying business can provide important context when evaluating a company's financial position.
For Phoenix Energy, that underlying business is oil and gas production, with operations focused primarily in the Williston Basin of North Dakota and Montana. Oil remains one of the world's most widely used energy commodities, with global demand averaging approximately 100 million barrels per day in recent years. Like any company operating in the energy sector, Phoenix Energy is subject to operational, commodity price, regulatory, and other business risks. According to the company, it also uses risk management strategies, including hedging a portion of its anticipated production, to help reduce exposure to short-term commodity price volatility.
As part of a broader due diligence process, investors should review several indicators when evaluating Phoenix Energy's corporate bond offerings.
Review the company's track record. Phoenix Energy has historically made interest payments in accordance with the terms of its bond offerings. As of March 31, 2026, the company reports having paid approximately $266.9 million in interest payments to bondholders, and according to the company, without missing a payment. Past payment history, however, is not a guarantee of future results.
Review third-party feedback. Third-party review platforms, such as Trustpilot, may provide insight into how prospective investors and existing investors describe their interactions with the company. As of July 2026, Phoenix Energy has approximately 324 reviews on Trustpilot. Individual testimonials are subjective and may not be representative of every investor's experience.
Review the company's financial growth. Investors should also review publicly available SEC filings to better understand the company's financial performance over time. According to its SEC filings, Phoenix Energy's gross annual revenue increased from $54.6 million in fiscal 2022 to $687.2 million in fiscal 2025 according to its SEC filings.1 Historical financial performance should be considered alongside the company's disclosures, risk factors, and other publicly available information when evaluating any investment opportunity.
DISCLAIMER
Not an offer to sell, nor a solicitation of an offer to buy, any securities. Securities offered through Crescent Securities Group, Inc., member FINRA/SIPC, pursuant to a registration statement and prospectus or private placement memorandum, as applicable, and only where lawful. Investors must meet suitability requirements. For a complete discussion of risks, you should carefully review the registration statement and prospectus or private placement memorandum for the applicable offering prior to making any decision to invest. These documents may be obtained at phxoffering.com. An investment involves risk, including possible loss of principal and may be illiquid or unsecured.
The foregoing does not constitute investment, financial or tax advice, and is only a general discussion of product types and associated markets. The specifics of an individual’s situation could alter significantly what investments or strategies may be advisable or desirable. Consult your financial, legal and/or tax advisor prior to considering any investment.
The foregoing discussion may contain forward-looking statements. These forward-looking statements are generally identifiable by forward looking terminology such as “expect,” “believe,” “anticipate,” “outlook,” “could,” “target,” “project,” “intend,” “plan,” “seek,” “estimate,” “should,” “will,” “approximately,” “predict,” “potential,” “may,” and “assume,” as well as variations of such words and similar expressions. Such statements are subject to various risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify and there can be no assurance that they will result or be achieved.
Copyright © 2026 California Business Journal. All Rights Reserved.
For California Business Journal Disclaimers, go to /terms-conditions/.
