Bonds

What is a bond?

A bond is a debt security, typically representing a debt of a company, an international organisation or a state. There are different types of bonds, but they all share one characteristic: the payment, on a specified due date, of interest (a coupon) that is fixed on purchase of the bond.

At Keytrade Bank, you can buy and sell hundreds of bonds, on the primary and secondary markets.

Advantages

• Possible reimbursement of your stake on the due date.
• You know in advance the amount and date of payment of the coupons (for a fixed-rate bond).
• Defensive investment.

Disadvantages

• Performance is limited.
• The repayment at maturity depends on the issuer's creditworthiness.
• If interest rates rise, the value of the bond will decrease.