DEFINITION of 'Fidelity Bond'

A form of business insurance that offers an employer protection against losses - either monetary or physical - caused by its employees' fraudulent or dishonest actions. Fidelity bonds are often held by insurance companies and brokerage firms, which are specifically required to carry protection proportional to their net capital. Among the possible forms of loss a fidelity bond covers include fraudulent trading, theft and forgery.

BREAKING DOWN 'Fidelity Bond'

Despite its name, a fidelity bond is solely an insurance policy and is neither tradable nor can it accrue interest like a regular bond. It is also known as an "honesty bond."


In Australia a fidelity bond is called "employee dishonesty insurance," and in the U.K. it's called "fidelity guarantee insurance."

RELATED TERMS
  1. Honesty Bond

    A bond posted by an organization or professional insuring the ...
  2. Banker's Blanket Bond

    A fidelity bond purchased from an insurance broker that protects ...
  3. Insurance Bond

    An investment instrument that is offered by life insurance companies. ...
  4. Personal Lines Insurance

    Property and casualty insurance products for individuals that ...
  5. Bond Insurance

    A type of insurance policy that a bond issuer purchases that ...
  6. U.S. Savings Bonds

    A U.S. savings bond is a government bond that offers a fixed ...
Related Articles
  1. Retirement

    Is Fidelity Right for Your Retirement?

    Fidelity is one of the leading brokerage firms in the U.S. The company has several retirement plan offerings and services to help clients meet their goals.
  2. Tech

    How Fidelity's Robo-Advisor Will Likely Compare

    Fidelity Investments recently announced that it will be launching its own robo-advisor service later this year, Fidelity Go. Here's what we know so far.
  3. Investing

    FAMRX, FASGX, FSANX: Introducing Fidelity Target Risk Funds

    Get a brief overview of Fidelity's seven target risk funds, with a description of each fund's asset allocation and expense ratio.
  4. Investing

    FSANX,FBALX,FGBLX,FDYSX: Fidelity Balanced Allocation Funds

    Find out about the five balanced allocation mutual funds that Fidelity Investments offers for investors with moderate levels of risk tolerance.
  5. Investing

    Fidelity Equity Funds Overview

    Learn all about Fidelity's equity funds, such as investment-style, large-, mid- and small-cap funds, and international-, sector- and index-based funds.
  6. Investing

    Fidelity Is Selling More Index Funds

    Learn about Fidelity Investments' presence in the index fund marketplace as of 2016 and discover what the company is doing to increase its market share.
  7. Retirement

    Fidelity IRA and Roth IRA Review

    Fidelity is a widely recommended online brokerage that offers IRAs and Roth IRAs, as well as other investments, with low fees and commissions, a variety of investment options, and other features.
  8. Tech

    How Fidelity Go Differs From Other Robo-Advisors

    Unlike robo-advisors, Fidelity's new online investment service is professionally managed by a team of experts rather than a set of algorithms.
  9. Insights

    Fidelity Investments Canada Announces New Fund Focused On Disruptive Innovations

    Fidelity Investments Canada ULC launched a new fund focused on investing in companies around the globe that are innovating and disrupting.
  10. Investing

    Fidelity Eyes ETF Expansion in Challenge to Schwab

    Fidelity could launch five new smart beta ETFs in a bid to compete with rival Charles Schwab.
Hot Definitions
  1. Asset Allocation

    An investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's ...
  2. IRR Rule

    A measure for evaluating whether to proceed with a project or investment. The IRR rule states that if the internal rate of ...
  3. Short Covering

    Short covering is buying back borrowed securities in order to close an open short position.
  4. Covariance

    A measure of the degree to which returns on two risky assets move in tandem. A positive covariance means that asset returns ...
  5. Liquid Asset

    An asset that can be converted into cash quickly and with minimal impact to the price received. Liquid assets are generally ...
  6. Nostro Account

    A bank account held in a foreign country by a domestic bank, denominated in the currency of that country. Nostro accounts ...
Trading Center