And their prices rise with inflation. So these bonds remove all credit risk and all interest-rate risk. As you mention, you must hold these bonds five years to avoid a penalty of three months' interest. They typically yield about a percentage point more than 10-year Treasury bonds. Instead, it's best to own them through mutual funds.
Most bond funds rise in value when interest rates fall.
But when interest rates fall, homeowners refinance their mortgages. So Ginnie Mae funds suddenly get flooded with torrents of prepaid principal, which reduces their return. So in the short term, garden-variety corporate bonds look more attractive. But over the long term, a low-cost Ginnie Mae fund will beat most bank CDs and bond funds, if that's what you're searching for. The best Ginnie Mae funds come with low expenses.