Money At Call

DEFINITION of 'Money At Call'

A short-term loan that does not have a set repayment schedule, but is payable immediately and in full upon demand. Money-at-call loans give banks a way to earn interest while retaining liquidity. Investors might use money at call to cover a margin account. The interest rate on such loans is called the call-loan rate.

BREAKING DOWN 'Money At Call'

Many different types of financial instruments can be "called," or declared payable immediately by the lender. A bond can be called, meaning that the issuer can decide to force the bondholder to redeem the bond before maturity. The investor is informed of the call option before purchase and the issuing company generally pays the investor a premium if it does choose to call the bond. Other fixed-income securities, like certificates of deposit, can also be callable. Even common and preferred stock can be callable if a company wants the option to buy back its shares at a certain price.



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RELATED FAQS
  1. Why doesn't the price of a callable bond exceed its call price when interest rates ...

    A callable bond provides the issuer (borrowing entity) with an option to redeem the bond before its original maturity date. ... Read Answer >>
  2. Why do companies issue callable bonds?

    Learn how callable bonds work, how they include an embedded call option, and understand the additional risks that callable ... Read Answer >>
  3. What risk factors should investors consider before purchasing a callable bond?

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  4. What are the advantages of investing in a callable bond?

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  5. Why is a premium usually paid on a callable bond?

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