Green bonds are used to support new and current initiatives that improve the environment and contribute to a more sustainable economy. Renewable energy, sustainable resource use, conservation, clean transportation, and climate change adaptation are all examples of “green.” How do green bonds generate revenue? Investors can use green bonds to put their money where their […]

Savings bonds are a type of government debt that is offered to citizens of the United States to help support federal spending. Savings bonds are purchased at a discount and mature at their full face value, but they do not pay regular interest. Series EE bonds are offered for half of their face value and […]

When you buy a Treasury bond, you are essentially lending money to the United States government. Let’s imagine you paid $100 for a bond that now has a face value of $150 and a 20-year maturity date. You can redeem that bond for at least $150 20 years after that date. These bonds are a […]

When governments and enterprises need to raise funds, they issue bonds. You’re giving the issuer a loan when you buy a bond, and they pledge to pay you back the face value of the loan on a particular date, as well as periodic interest payments, usually twice a year. Bonds issued by firms, unlike stocks, […]

Bonds and interest rates have an inverse connection. Bond prices normally fall when the cost of borrowing money rises (interest rates rise), and vice versa. How do interest rates effect bonds? Bonds and interest rates have an inverse connection. Bond prices normally fall when the cost of borrowing money rises (interest rates rise), and vice […]

“Through Vanguard, I have the GNMA fund. I’m concerned about maintaining it because interest rates appear to have nowhere to go except up, and the basic rule is that bonds fall when interest rates rise. But does the same hold true for GNMA bonds?” What Are GNMA Bonds (GNMAs)? The Government National Mortgage Association (a.k.a. […]

“Through Vanguard, I have the GNMA fund. I’m concerned about maintaining it because interest rates appear to have nowhere to go except up, and the basic rule is that bonds fall when interest rates rise. But does the same hold true for GNMA bonds?” What Are GNMA Bonds (GNMAs)? The Government National Mortgage Association (a.k.a. […]

Fixed-income securities are debt instruments that pay a fixed rate of interest to investors in the form of coupon payments. Interest is normally paid twice a year, with the principal invested returning to the investor at maturity. Fixed-income assets, such as bonds, are the most frequent. Firms raise funds by selling fixed-income securities to investors. […]

A bond is just a debt that a firm takes out. Rather than going to a bank, the company obtains funds from investors who purchase its bonds. The corporation pays an interest coupon in exchange for the capital, which is the annual interest rate paid on a bond stated as a percentage of the face […]

Savings bonds are debt securities issued by the United States government to cover its borrowing needs. When you buy a savings bond in the United States, you’re effectively lending your money to the government at a certain interest rate, and the government is responsible for returning the loan in full – principle plus interest. Because […]