Tether is a company.
When you buy tether, you are making a loan to that company, who promises to pay you back 1 USD for each tether you own. It's something like a Debt Security.
You basically become a creditor of that company.

You are making a loan to Tether with zero interest rate. That's a pretty good deal for Tether. So you are borrowing money with 0% interest rate, assuming all the risks, as Tether may go the bankrupt and do not pay you back. Even so, there are a few advantages of buying tether:

• Taxes- You can sell your cryptos for tether and do not pay taxes (yet). This way you can postpone your taxes in many countries(according to your country legislation)
• Convenience- You can easily move your USDT around exchanges across the globe without any burocracy and faster than you would move USD.

This cryptocurrency is closely connected to Bitfinex, as they share the same CEO. Bitfinex is one of the biggest exchange in the world. As they make a lot of money I believe they may have their Tether backed up, but I am looking forward to see the results of any real audit.

Recently there have been a lot of FUD involving Tether (USDT), but I have not seen proper warns about the risks associate with Tether Exchanges, who are the Tether's Biggest Creditors (Tether Rich List).

If you take fast glance at Tether Rich List, you will see who are the biggest creditors:

As we can see, Binance, Bittrex and Huobi are the biggests creditors of Tether. And Binance is the biggest of them all.
I highly recommend you do not leave your savings on those exchanges, as they are like double-risk. You have the risk associate with the exchange, and the risk associate with Tether.

If tether does not pays his creditors, will Binance and those others survive?

Edit: Added Poloniex to the list.