Description
Callable Bonds are securities that may be redeemed by the issuer prior to the stated maturity date at the issuer's discretion. The bonds may be called on specific dates only, or periodically upon notice to you.
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Benefits
This flexible investment is available in a variety of maturities so you can choose the time frame that works best for you.
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Features
Callable bonds usually offer you higher yields than comparable non-callable bonds to compensate for the higher risk that your bonds will be called away.
Maturities may be as short as three years to as long as 30 years.
Generally these bonds are "called in" during periods of declining interest rates, leaving investors to reinvest at lower yields.
These bonds will typically have a period when they may not be called, known as the "non-call period," which can range from three months to five years.
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Callable Bonds