War Bond

AAA

DEFINITION of 'War Bond'

Debt securities issued by a government for the purpose of financing military operations during times of war. It is an emotional appeal to patriotic citizens to lend the government their money because these bonds offer a rate of return below the market rate.

INVESTOPEDIA EXPLAINS 'War Bond'

At first they were called Defense Bonds and issued by the U.S. Government, but that name was changed to War Bonds after the Japanese attack on Pearl Harbor on Dec 7, 1941. The bonds were zero-coupon bonds that sold for 75% of their face value in denominations from $10 to $100,000. To get an idea of the relative value of a dollar in 1942, in current terms, something that cost $1.00 in 1942, would cost around $11.00 in 2002.

VIDEO

RELATED TERMS
  1. War Damage Insurance Corporation

    A government financial protection arm created during World War ...
  2. War Exclusion Clause

    A clause in an insurance policy that specifically excludes coverage ...
  3. Freedom Shares

    Original issue discount bonds issued by the U.S. Treasury from ...
  4. Series E Bond

    Accrual bonds that were issued at 75% of the face amount. Interest ...
  5. War Babies

    A name given to securities in companies that are defense contractors. ...
  6. Bond

    A debt investment in which an investor loans money to an entity ...
Related Articles
  1. Are there special benefits for U.S. ...
    Retirement

    Are there special benefits for U.S. ...

  2. War's Influence On Wall Street
    Bonds & Fixed Income

    War's Influence On Wall Street

  3. Introduction To Bonds
    Investing

    Introduction To Bonds

  4. Benefits for Members of the Armed Forces
    Retirement

    Benefits for Members of the Armed Forces

comments powered by Disqus
Hot Definitions
  1. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another ...
  2. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  3. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  5. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  6. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
Trading Center