DEFINITION of 'Fidelity Bond'

A form of business insurance that offers an employer protection against losses - either monetary or physical - caused by its employees' fraudulent or dishonest actions. Fidelity bonds are often held by insurance companies and brokerage firms, which are specifically required to carry protection proportional to their net capital. Among the possible forms of loss a fidelity bond covers include fraudulent trading, theft and forgery.

BREAKING DOWN 'Fidelity Bond'

Despite its name, a fidelity bond is solely an insurance policy and is neither tradable nor can it accrue interest like a regular bond. It is also known as an "honesty bond."


In Australia a fidelity bond is called "employee dishonesty insurance," and in the U.K. it's called "fidelity guarantee insurance."

RELATED TERMS
  1. Blanket Honesty Bond

    A kind of fidelity bond that covers an employer for all of the ...
  2. Banker's Blanket Bond

    A fidelity bond purchased from an insurance broker that protects ...
  3. Honesty Bond

    A bond posted by an organization or professional insuring the ...
  4. Discovery Bond

    A type of fidelity bond used to protect a business from losses ...
  5. Insurance Bond

    An investment instrument that is offered by life insurance companies. ...
  6. Blanket Bond

    Insurance coverage carried by brokerages, investment bankers, ...
Related Articles
  1. Retirement

    Is Fidelity Right for Your Retirement?

    Fidelity is one of the leading brokerage firms in the U.S. The company has several retirement plan offerings and services to help clients meet their goals.
  2. Investing

    Fidelity Mutual Funds Overview

    Learn about the mutual funds offered through Fidelity Investments' huge product line, and how the Fidelity investment philosophy differs from its competitors.
  3. Investing

    The 4 Best Fidelity Fixed Income Mutual Funds

    Learn about four mutual funds managed by Fidelity that invest in various fixed income securities, including bonds and asset-backed securities.
  4. Financial Advisor

    How Fidelity's Robo-Advisor Will Likely Compare

    Fidelity Investments recently announced that it will be launching its own robo-advisor service later this year, Fidelity Go. Here's what we know so far.
  5. Investing

    Fidelity Equity Funds Overview

    Learn all about Fidelity's equity funds, such as investment-style, large-, mid- and small-cap funds, and international-, sector- and index-based funds.
  6. Investing

    FSANX,FBALX,FGBLX,FDYSX: Fidelity Balanced Allocation Funds

    Find out about the five balanced allocation mutual funds that Fidelity Investments offers for investors with moderate levels of risk tolerance.
  7. Investing

    FAMRX, FASGX, FSANX: Introducing Fidelity Target Risk Funds

    Get a brief overview of Fidelity's seven target risk funds, with a description of each fund's asset allocation and expense ratio.
  8. Fidelity IRA and Roth IRA Review

    Fidelity is a widely recommended online brokerage that offers IRAs and Roth IRAs, as well as other investments, with low fees and commissions, a variety of investment options, and other features.
  9. Investing

    Fidelity Is Selling More Index Funds

    Learn about Fidelity Investments' presence in the index fund marketplace as of 2016 and discover what the company is doing to increase its market share.
  10. Investing

    How Fidelity Go Differs From Other Robo-Advisors

    Unlike robo-advisors, Fidelity's new online investment service is professionally managed by a team of experts rather than a set of algorithms.
RELATED FAQS
  1. Does Fidelity have mutual funds?

    Learn about Fidelity investment mutual fund offerings. In addition, discover what other products and services Fidelity has ... Read Answer >>
  2. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  3. Can your insurance company cancel your policy without notice?

    Learn about your rights as an insured when it comes to your insurance policy being canceled, including how to access your ... Read Answer >>
  4. Who or what is backing municipal bonds?

    Learn about the basics of municipal bonds, including the various revenue sources that are utilized to back or secure municipal ... Read Answer >>
  5. How do I find mutual funds that track indexes?

    The two best sources for finding index funds are Fidelity Investments and Vanguard.Of the 57 index funds in investment research ... Read Answer >>
Hot Definitions
  1. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  2. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  3. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  4. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  5. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  6. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
Trading Center