Corporate Bonds Benefits

What means bond. Benefits of corporate bonds Predictable Income. Offer fixed interest payments for the life of the bond. So investors always know when and how much to expect. Although longer maturity bonds may offer higher income. Corporate bonds offer various coupon structures Zero coupon rate. Fixed coupon rate. An estate protection feature.

4.Corporate bonds offer various coupon structures:

Zero coupon rate bonds do not pay any interest during their lifetimes and are issued at a discount from par value. However, income is taxed annually although not received by the investor until maturity.

Fixed coupon rate is set at the time of issuance and does not change until the bond has matured.

5.Survivor’s Option. Some corporate bonds offer an estate protection feature, which allows an estate, upon evidence of death of the bondholder, to buy back bonds from the issuer and any accrued interest.

6.Liquidity. Investors who need access to cash may sell their bonds prior to maturity, at current market prices. However, if bonds are held until the final maturity date, the investor will receive the full face value, subject to credit risk.