The vast majority of bonds on the market are taxable, including all corporate bonds. Somemunicipal bonds, state bonds, and other governmental bonds may also be subject to taxes, even though they are traditionally thought of as being tax free. The standard of whether the bond is tax free or ...
Tax-wise, Treasury bonds are fairly straightforward. Any interest earned on a Treasury bond investment istax-exempt at the state and local levels, but that interest is taxed by the federal government. If you hold your Treasury bond with the U.S. government, the amount of interest you earned...
Building an investment portfolio may require personalization and finesse, but it can also be ultra-simple.
An ETF can be traded throughout the day on exchanges, like a stock. But many mutual funds (like open-ended mutual funds) are only priced once daily, at the end of a trading day, and can only be redeemed after that price is determined daily once trading ends. ETFs are often designed ...
A baby bond is a fixed income security that is issued in small-dollar denominations, with a par value of less than $1,000. The small denominations enhance the attraction of baby bonds to average retail investors.小额债券是一种以小面值发行的固定收入证券，票面价值低于1000美元。小面额债券增强了...
A bond is a loan taken by the company or business. Instead of traditionally going to a bank, the company gets the money from investors who buy the companies bonds. In return for the capital, the company pays an interest coupon. The annual interest rate is paid on a bond, which is expr...
A savings bond is a loan to the U.S. government that’s issued by the U.S. Treasury. When you buy one, you are lending money to the government. You can register yourself or someone else — even if they’re under 18 — as the owner or co-owner of a savings bond. A bond’s ...
Tax-equivalent yield = Tax-free bond yield / (1 – marginal tax rate) Example of Tax-Equivalent Yield Suppose you’re an investor whose tax bracket is 32%. You’re comparing a tax-free municipal bond that yields 5% to a taxable corporate bond. Using the tax-equivalent yield formula,...
A taxable bond is a debt security (i.e., a bond) whose return to the investor is subject to taxes at the local, state, or federal level, or some combination thereof. An investor trying to decide whether to invest in a taxable bond ortax-exempt bondshould consider what they will have ...
A paymentbondand a performance bond work hand in hand. A payment bond guarantees a party pays all entities, such as subcontractors, suppliers, and laborers, involved in a particular project when the project is completed. A performance bond ensures the completion of a project. Setting these two ...