A bond is a debt security. It, like stocks, can be traded on the stock exchange. However, unlike a share, it cannot receive guaranteed dividend payments. But on the other hand, its advantage is that you can receive a certain amount on the day it is repaid.
Instructions
Step 1
Remember that a bond has a statute of limitations. It is called the maturity date. This is the name of the date by which the bond must be returned to the company that issued it. The duration of the bond varies. They are even divided into three groups: short-term (5 years), medium-term (from 5 to 12 years) and long-term (from 12 years and beyond).
Step 2
Before trading in bonds, certain interest rates are set for them. Experts divide them into floating and fixed. The latter are more common. However, when choosing a floating rate, you can get more income. True, it depends on the market situation.
Step 3
The easiest way is to trade bonds with the help of third parties. To do this, you need to contact a brokerage company. There you will be offered to conclude a contract for the provision of services. It will contain the amount that you agree to pay for the work of brokers on the market.
Step 4
In addition, you will need to open your bank account, the number of which you will write down in the service agreement. The money you earned will be transferred to it.
Step 5
Then you just have to interact with the broker. This usually happens over the phone. You can get the information you are interested in regarding your securities at any time. The broker will inform you about the market situation, the favorable time for transactions, etc.
Step 6
If you decide to cash out your bond, the broker will also do it for you. The money will be transferred to your account opened at the conclusion of an agreement with a brokerage company.
