What is the No Risk Portfolio (NRP)?
The NRP is a portfolio designed to provide income for 1 year. It also is comprised of the some of the lowest risk assets you can buy. If you are concerned about the markets and don’t want think about the possibility of losing your principal, the NRP is for you.
Why is NRP Useful For?
The NRP is where you put your money for one year at the lowest risk.
What is The Income Yield?
The income yield is 4.20%.
What are the Main Benefits of the DNP?
- High Interest – You get the best rates available, somewhat tied to Federal Reserve short term rates.
- Lock In – You will get a higher interest rate, locked in for 1 year.
- Lowest Risk – The risk of loss of your money is very low, almost zero.
- Market Based Securities – These securities can be bought at most brokers who sell CDs and Treasury Bonds.
What are the Risks of the DNP?
By design, these investments are low risk.
The U.S Treasury Bills in the portfolio are very low risk. The reason is that the U.S Government under its agency can borrow, or print money to pay its debts. In the financial markets, Treasury bonds are often spoken of as being “risk free”. This is almost true.
Why is the risk of Treasury bonds not actually zero? Well, the U.S. Treasury doesn’t have unlimited authority to issue bonds to pay off debts. Its authority is limited by the debt ceiling established by Congress. It’s technically possible that some debt could default or be delayed in payment if the ceiling is reached.
This has never happened and it very unlikely to occur. Even if it did this doesn’t mean that all bonds would default. This discussion is not meant to suggest that Treasuries are risky at all, but let’s put everything out there.
The second type of investment in the portfolio are Certificates of Deposit (CDs), issued by banks. These investments are low risk because they are insured by the Federal Deposit Insurance Corporation (FDIC). If the bank fails, you get paid in full by the FDIC.
In actual practice, this doesn’t happen. When a bank fails, the FDIC saves the bank and it merges with a healthy bank. Customers may not even realize their bank failed.
How do I buy these Securities?
These securities can be bought at your broker or stock exchange. It is possible to buy CDs at your bank, but not Treasury bonds. It is easier to manage your portfolio if you buy both of these securities at your broker.
How Do I Find These Securities? What is a CUSIP?
All securities sold in public markets are registered with Securities and Exchange Commission (SEC) with an identifier called a CUSIP. This includes common stocks, bonds, and CDs. Since CDs and bonds don’t have stock symbols, you need the CUSIP to find it at your broker.
NRP Portfolio – 01/19/2025
| Security | Name | CUSIP | Description | Maturity | Yield/YTM |
| U.S Treasury | U.S. Treasury bond, 1 year term left. | 91282CKB6 | Treasury bond, pays coupons every six months (08/31 and 02/29) | 2/28/26 | 4.30% |
| CD | CD – BNY Mellon, Ntnl Ass NY | 05584CUR5 | CD – Pays coupon at maturity – January. | 1/16/26 | 4.15% |
| U.S Treasury | U.S. Treasury Bill, 1 year term. | 912797NU7 | Treasury bond, pays coupon at maturity | 12/26/25 | 4.23% |
| CD | First Carolina Bank NC | 31944MEJ0 | CD – Pays coupon monthly | 1/23/26 | 4.10% |