Income Deposit Security - IDS

AAA

DEFINITION of 'Income Deposit Security - IDS'

A security that combines common stock and notes of the issuer to provide regular income payments to the holder of the security. The holder of the income deposit security receives dividends from the common stock, and fixed income from the debt instrument in the IDS.

INVESTOPEDIA EXPLAINS 'Income Deposit Security - IDS'

These types of securities are traded on stock exchanges and can be purchased by any type of investor. The companies that use this form of security are usually very stable and mature businesses. (This type of security is similar to the Canadian income trust, whose structure helps efficient distribution of a company's cash flow to investors.)

RELATED TERMS
  1. Dividend

    A distribution of a portion of a company's earnings, decided ...
  2. Income Participating Security - ...

    A security that comprises a common share and a high-yield bond ...
  3. Security

    A financial instrument that represents: an ownership position ...
  4. Note

    A financial security that generally has a longer term than a ...
  5. Real Estate Investment Trust - ...

    A security that sells like a stock on the major exchanges and ...
  6. Fixed-Income Security

    An investment that provides a return in the form of fixed periodic ...
RELATED FAQS
  1. What's the difference between bills, notes and bonds?

    Treasury bills (T-Bills), notes and bonds are marketable securities the U.S. government sells in order to pay off maturing ... Read Full Answer >>
  2. What are the drawbacks of using the Dividend Discount Model (DDM) to value a stock?

    Drawbacks of using the dividend discount model (DDM) include the difficulty of accurate projections, the fact that it does ... Read Full Answer >>
  3. How can you use a debt service coverage ratio (DSCR) to evaluate real estate investments?

    Historically, real estate has been an attractive way to achieve portfolio diversification for a wide range of investors due ... Read Full Answer >>
  4. What is the average annual dividend yield of companies in the banking sector?

    The average annual dividend yield of companies in the banking sector is 2.4%. This dividend yield is higher than the risk-free ... Read Full Answer >>
  5. What kind of securities should a risk-averse investor buy?

    While most investors are focused on investment options with high rates of return, some individuals are more concerned with ... Read Full Answer >>
  6. Why is it better to invest in a blue-chip company that pays dividends versus a blue-chip ...

    It is better to invest in a dividend-paying blue-chip company because the dividend implies a greater margin of safety. A ... Read Full Answer >>
Related Articles
  1. Bonds & Fixed Income

    Introduction To Convertible Preferred Shares

    These securities offer an answer for investors who want the profit potential of stocks but not the risk.
  2. Bonds & Fixed Income

    Asset Allocation In A Bond Portfolio

    An investor's fixed-income portfolio can easily beat the average bond fund. Learn how and why!
  3. Personal Finance

    Should You Track The Cost Of Retirement Income?

    Today, workers face a challenge when saving for retirement, because retirement income is getting more expensive, and the savings are not keeping up.
  4. Economics

    Where To Search For Yield Today

    It’s hard to miss that there has been a pronounced slowdown in the U.S. economy this year.
  5. Mutual Funds & ETFs

    Should the YYY ETF Be on Your Radar?

    Why you should, or shouldn't, invest in YYY.
  6. Mutual Funds & ETFs

    How To Build A Bond Ladder?

    Bond laddering is a strategy used when building a portfolio: an investor can spread out interest rate risk and create a stream of cash flows for income.
  7. Economics

    What is the Income Effect?

    In economics, the income effect is the change in the consumption of goods caused by a change in income, whether income goes up or down.
  8. Retirement

    How To Move From Nest Egg To Income?

    Income vs. a nest egg is closely tied to what most of us are ultimately interested in for retirement – maintaining our standard of living and to travel.
  9. Stock Analysis

    Is This Dividend Stock A Value Or Value Trap?

    We can say that Fifth Street Finance has had a rough year, but there's a huge difference between an undervalued stock and a stock that's cheap for a reason
  10. Stock Analysis

    What Makes LinnCo Different From MLPs?

    MLPs are some of the favorite investments of dividend investors, as the surge in the energy industry increased the amount of income that MLPs paid out to.

You May Also Like

Hot Definitions
  1. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  2. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  3. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  4. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
  5. Adverse Selection

    1. The tendency of those in dangerous jobs or high risk lifestyles to get life insurance. 2. A situation where sellers have ...
Trading Center