What is the Education Savings Bond Program?

July 7, 2024 No Comments

A: An education savings bond program allows qualified taxpayers to exempt all or a portion of interest earned upon redemption of eligible savings bonds from their annual gross income. To qualify for this program, savings bonds must be Series EE or Series I bonds issued after 1989.

What is the effective interest method of amortization?

July 7, 2024 No Comments

A: The effective interest method is an accounting practice used for discounting a bond. This method is used for bonds sold at a discount; the amount of the bond discount is amortized to interest expense over the bond’s life. Explaining the Effective Interest Rate Method

What is the quickest, easiest and cheapest way to buy a bond?

July 7, 2024 No Comments

A: Bonds usually can be purchased from a bond broker through full service or discount brokerage channels, similar to the way stocks are purchased from a stockbroker. Dealing with a bond broker can be prohibitive to some, however, because many require high minimum initial deposits.

What is the safest investment?

July 7, 2024 No Comments

Due to the variety of options on the market and the unpredictability of the economic climate, it is difficult to identify one investment that is clearly safest. But some investment categories are significantly safer than others. For example, certificates of deposit (CDs), money market accounts,

What Is a Triple Tax-Free Municipal Bond?

July 7, 2024 No Comments

A: At its core, a triple tax-free municipal bond is just like any corporate bond — it is a debt instrument, a loan given to a government authority or municipality in order to help it meet certain financial objectives or complete projects in the community. As with

What are the pros and cons of operating on a balanced-budget?

July 7, 2024 No Comments

A: Few issues are more complicated, contentious and controversial in contemporary American politics than balancing the federal government’s budget. Those who argue in favor of a balanced budget offer many claims about the deleterious impacts of huge federal debt. Others counter that balanced budgets would

What is accrued interest, and why do I have to pay it when I buy a bond?

July 7, 2024 No Comments

A: A bond represents a debt obligation whereby the owner (the lender) receives compensation in the form of interest payments. These interest payments, known as coupons, are typically paid every six months. During this period the ownership of the bonds can be freely transferred between

What are the risks associated with investing in a treasury bond?

July 7, 2024 No Comments

A: It’s common for financial analysts and investment publications to refer to U.S. Treasury bonds (T-bonds) as risk-free investments. This designation is approximately true and, at the same time, misleading. Thanks to the Federal Reserves’ implicit backing of all Treasury Department obligations, there is virtually

What is the difference between a debenture and a bond?

July 7, 2024 No Comments

A: Debentures and bonds are types of debt instruments that can be issued by a company. In some markets (India, for instance) the two terms are interchangeable, but in the U.S., they refer to two separate kinds of debt securities. The functional differences center around

What are the risks of investing in a bond?

July 7, 2024 No Comments

A: The most well-known risk in the bond market is interest rate risk – the risk that bond prices will fall as interest rates rise. By buying a bond, the bondholder has committed to receiving a fixed rate of return for a set period. Should the market

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