What are nonnegotiable securities commonly exemplified by?

Nonnegotiable securities are characterized by their limitations on transferability, meaning they cannot be easily bought or sold on the open market. Savings bonds are a prime example of nonnegotiable securities because they are issued by the government and designed primarily for individual investors as a way to save.

When you purchase a savings bond, you are committing to hold it until it matures unless you redeem it at face value through a specific process, typically at designated points like banks or federal institutions. They cannot be sold or traded freely like other types of securities, which sets them apart from instruments such as corporate or municipal bonds, which are actively traded on the market. Therefore, identifying savings bonds as nonnegotiable securities aligns perfectly with their inherent characteristics.