Taxable Bond


DEFINITION of 'Taxable Bond'

A debt security whose return to the investor is subject to taxes at the local, state or federal level, or some combination thereof.

BREAKING DOWN 'Taxable Bond'

The majority of bonds issued are taxable bonds. Entities that have traditionally offered tax- free bonds have begun to issue taxable bonds to finance projects that do not benefit the public at large. For example, some universities are offering taxable bonds to finance building new facilities. These bonds, however, return the market rate as opposed to the lower return rate offered by tax-free bonds.

  1. Yield To Maturity (YTM)

    The total return anticipated on a bond if the bond is held until ...
  2. Bond

    A debt investment in which an investor loans money to an entity ...
  3. Fully Taxable Equivalent Yield

    The yield on a municipal bond, when the effect of reduced taxes ...
  4. Corporate Bond

    A debt security issued by a corporation and sold to investors. ...
  5. Interest Rate

    The amount charged, expressed as a percentage of principal, by ...
  6. Yield

    The income return on an investment. This refers to the interest ...
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