Corporate bonds are debt issued, typically by public corporations. When you invest in a bond, the corporation pays interest on the number of bonds you purchased, usually semiannually.
Corporate bonds provide regular interest payments over the life of the bond.
Who Should Invest In Corporate Bonds?
Corporate bonds are appropriate for investors seeking regular income payments.
- Attractive yields – Corporate bonds usually offer higher yields than comparable-maturity government bonds or CDs.
- Recurring Income – Since corporate bonds pay a fixed rate of interest, interest payments are usually made twice a year.
- Call Protection – In certain circumstances, such as a period of lower interest rates, corporations have the ability to repay their debt prior to the maturity date stated on the bond. Most corporate bonds provide the investor some type of protection from these early payoffs.
- Liquidity & Marketability – In the event you would need to sell your bonds before their maturity date, corporate bonds can usually be sold on any business day at their current market value. This value may be more or less than your original investment.
- Taxation – Interest and capital gains earned from corporate bonds are subject to both federal and state taxes.
- Diversity – Corporate bonds provide the opportunity to choose from a variety of sectors, structures and credit-quality characteristics to meet your investment objectives.
For more information on corporate bonds, please contact a Hennion & Walsh Municipal Bond specialist.
All investments involve risk, including loss of principal. Past performance does not guarantee future returns.