What is a Non-Marketable Security?

There is a plethora of investment options for consumers to choose from. Stocks, bonds, CDs, Money Markets, Treasury Bills are all ways people can make their money earn more money. Some of these choices are marketable securities others are Non-Marketable Securities.

What is a Non-Marketable Security?

Non-Marketable Securities are usually US Savings Bonds, and private shares. Individuals cannot sell these types of securities to another investor. To redeem Non-Marketable Securities the shareholder must work directly with the issuer, per the original terms of the investment.

What is Required to Purchase a Non-Marketable Security?

US Savings Bonds need to be purchased by someone who is over the age of 18 and they must provide a social security number to purchase. During the course of bond ownership, the US Savings Bonds cannot be transferred to another person because they are Non-Marketable Securities. They cannot be traded on the open market freely like stocks. They are investments to be held solely by the owner during the lifetime of their existence.

That is not to say that US Savings Bonds cannot make great gifts. Even though they are Non-Marketable Securities they can be purchased for others. For example, if you need to purchase a baby gift, a Non-Marketable Security US Savings Bond can be purchase in the name and social security number of the child and when they turn eighteen they will be able to access the bond at will.

In general, Non-Marketable Securities cannot be easily be bought or sold. This helps enhance the quality of these types of investments. US Savings Bonds are considered to be one of the safest types of investments consumers can choose to partake in. There are limited amounts an individual can buy per year, they have a low principal risk and a guaranteed yield on the investment. If individuals were planning for their own future (and their family’s), then a Non-Marketable Security would make an excellent addition to their portfolio.