Term Bond

AAA

DEFINITION of 'Term Bond'

Bonds from the same issue that share the same maturity dates. Term bonds that have a call feature can be redeemed at an earlier date than the other issued bonds. A call feature, or call provision, is an agreement that bond issuers make with buyers. This agreement is called an "indenture", which is the schedule and the price of redemptions, plus the maturity dates.

INVESTOPEDIA EXPLAINS 'Term Bond'

Some corporate and municipal bonds are examples of term bonds that have 10-year call features. This means the issuer of the bond can redeem it at a predetermined price, at specific times before the bond matures.



A term bond is the opposite of a serial bond, which has various maturity schedules at regular intervals until the issue is retired.

RELATED TERMS
  1. Call Premium

    1. The dollar amount over the par value of a callable fixed-income ...
  2. Callable Bond

    A bond that can be redeemed by the issuer prior to its maturity. ...
  3. Convertible Bond

    A bond that can be converted into a predetermined amount of the ...
  4. Corporate Bond

    A debt security issued by a corporation and sold to investors. ...
  5. Maturity Date

    The date on which the principal amount of a note, draft, acceptance ...
  6. Maturity

    The period of time for which a financial instrument remains outstanding. ...
Related Articles
  1. Callable bonds - because they carry the risk of being cashed in early - often have a higher coupon rate.
    Bonds & Fixed Income

    Bond Call Features: Don't Get Caught ...

  2. Bonds & Fixed Income

    When Your Bond Comes Calling

  3. Investing

    The Advantages Of Bonds

  4. Options & Futures

    Callable Bonds: Leading A Double Life

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center