Long-Term Taxable Investment Vehicles
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Increase Your Yield by Expanding Your Time Horizon

Extending maturities on your cash investments can make a significant difference in yield. Investable cash your business won’t need for more than a year can be put into vehicles with longer maturities that may improve your long-term yield. Examples include zero-coupon instruments, corporate bonds, floating-rate notes and mutual funds.

  • Improve your long-term yield
  • Choose from a range of vehicles that complement your company’s investing goals
  • Create a flexible portfolio based on varying yields, credit quality, maturity and liquidity

Compare Long-Term Taxable Investment Vehicles

Investment Vehicle Income/ Tax Status Credit Quality Maturities/ Liquidity Denominations
Zero-Coupon Instruments Purchased at a substantial discount from par value (the value at maturity). All interest paid at maturity. Varies depending on the creditworthiness of the issuer. Maturities from 1 to 30 years or more. Good liquidity. Secondary market generally available. Minimum of $1,000.
Certificates of Deposit Zero-coupon or interest-bearing. Varying interest rates. Taxable. FDIC-insured up to $100,000 for domestic banks. Wide range of maturities. Moderate liquidity. General minimums:

Insured CDs $1,000.

Jumbo CDs $100,000.

Institutional CDs $1,000,000.
Treasury Notes/Bonds Exempt from state and local taxes. Highest credit quality. Least credit risk. Maturities from 1 to 30 years. Highly liquid. Various.
Federal Agency Securities Yields track Treasury bills but generally offer slightly higher returns. May be exempt from state and local taxes. Very high credit quality. Flexible maturities. Highly liquid. Various.
Medium-term Notes Interests generally paid on a semi-annual, 30-day month or 360-day basis. Taxable. Generally rated by major rating agencies. Maturities from 9 months to 15 years. Liquidity subject to current market conditions. $5,000.
Corporate Bonds Taxable. Generally rated by major rating agencies. Maturities from 2 to 30 years. Liquidity subject to current market conditions. Various.
Floating-Rate Notes Variable interest rate tied to a money market index. Generally lower yields than fixed notes of the same maturity. Generally rated by major rating agencies. Maturity is usually 5 years. Liquidity subject to current market conditions. $100,000.
Common Stock 70% of dividends may be deducted from taxable income. Not applicable. No maturity. Liquid based on trading activity. Various.
Preferred Stock 70% of dividends may be deducted from taxable income. Rated. No maturity. Liquid based on trading activity. Various.
Mutual Funds Fluctuating returns. May be taxable or tax-exempt. Depends on underlying securities. Not guaranteed or insured. No maturity. Generally full redemption value at current asset value. $1,000.
Defined Asset Funds (Unit Investment Trusts) Monthly income. State current yields. Long-term return relatively fixed. Generally rated investment-grade. Wide range of maturities. Good liquidity. Secondary market generally available. $1,000.

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Merrill Lynch, Pierce, Fenner & Smith Incorporated is a registered broker-dealer, not a bank, and the WCMA account is not a bank account. Banking services are provided by licensed banks or by third parties through arrangements with licensed banks. Unless otherwise indicated, investment products are not FDIC-insured, not guaranteed by a bank and may lose value.

Merrill Lynch does not provide tax, accounting or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used for the purpose of avoiding U.S., federal, state or local tax penalties. Please consult your tax advisor as to any tax, accounting or legal statements made herein.

Neither Merrill Lynch nor its Financial Advisors offers tax advice. Please consult a tax professional to determine the impact of your choices on your tax obligations.