| Your bank or institution will give you bonds in | | | | will also allow the holder to seek taxation |
| exchange for you lending them cash, they issue | | | | exemption. |
| bonds that promise to pay you back in the future | | | | Corporate Bonds: - Corporate companies float |
| tense including interest. | | | | corporate bonds. These bonds generally carry high |
| Bonds are they risk free? | | | | risk no matter how big or small the corporate |
| A bond has low risk attributes but it is not risk | | | | company is. |
| free. If you purchase corporate bonds, that | | | | Government Bonds: - If a government wants to |
| essentially means you are purchasing a claim to | | | | build finances they will generally issue government |
| their assets. Just like a conventional person, big | | | | bonds. These are generally risk free in nature and |
| organizations tend to take on debt, which must | | | | can also provide the owner with taxation |
| be paid back; they take on debt in trust to profit | | | | exemptions. |
| from it. It is possible for them to take on too | | | | Saving Bonds: - The government can also issues |
| much debt resulting in them not being able to pay | | | | savings bonds, the huge plus to having these |
| it back. Just like a conventional person not being | | | | bonds is that you get taxation exemptions similar |
| able to make their credit payments. If a company | | | | to mutual bonds, it's very important to |
| files for bankruptcy they will be unable to payoff | | | | understand the attributes of the specific bond you |
| the bonds that you bought from them. This | | | | may want to invest in. factors to consider are |
| means that you as the investor can in theory lose | | | | Maturity period, purchase cost, fiscal hold backs |
| the bonds that you invested in them, fortunately | | | | and decision making factors, these things should all |
| bonds are rarely lost this way. | | | | be taken into account when investing in bonds. |
| If you invest in bonds, you can sell them to the | | | | To Conclude |
| market at any time. Just like stock bonds they | | | | Bonds are an excellent but generally overlooked |
| come with an assigned value determined by the | | | | investment option keeping in mind how very little |
| market. When you sell it on the open market, you | | | | risk bonds have it is amazing how many people |
| should keep in mind that people will enquire to | | | | have little to no knowledge about them. Bonds |
| know the interest rate of the bonds get-out | | | | require very simply understanding; you purchase |
| clause and the rate the market values it at. An | | | | them and sell them if you want to. The key to |
| example, if you acquired a bond paying five | | | | investing in bonds is to set a time frame for how |
| percent interest and you want to sell it when the | | | | long you intend to keep the bonds. Bonds are |
| interest has gone up to 9% you will get an | | | | ordinarily a long term investment. When investing |
| inferior price than what you initially paid. A person | | | | in corporate bonds, it's important that you read |
| could easily get a new bond, instead of your bond. | | | | up on their current bond rating. A bond evaluation |
| Looking at the different types of bonds | | | | is a letter grade assigned to each bond to tell |
| Municipal Bonds: - Municipal bonds known also as | | | | investors how high-risk it is. Stay away from |
| 'minis'. They signify the bonds, which have been | | | | "junk" bonds. |
| issued by municipal corporations. Municipal bonds | | | | |