noncallable bond

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Word: Noncallable Bond

Part of Speech: Noun

Definition: A noncallable bond is a type of bond that cannot be redeemed (or cashed in) by the issuer before a specific date, usually when the bond reaches its maturity. This means that if you buy this bond, you have to keep it until that set date, and you cannot ask for your money back earlier.

Usage Instructions:

• Use "noncallable bond" when talking about investments, especially in finance or when discussing types of bonds.
• It is important to know that this term is mainly used in the context of investing and financial markets.

Example:

• "I invested in a noncallable bond because I wanted a steady income for ten years without worrying about the issuer paying me back early."

Advanced Usage:

• Noncallable bonds are often favored by investors seeking stability, as they provide guaranteed interest payments until maturity.
• Investors should consider the interest rate environment, as noncallable bonds may be less favorable if interest rates rise significantly after the bond is issued.

Word Variants:

• Callable Bond: This is the opposite of a noncallable bond. A callable bond can be redeemed by the issuer before its maturity date.
• Bond: This is a broader term that refers to a fixed income instrument that represents a loan made by an investor to a borrower.

Different Meanings:

• In general finance, "callable" refers to the ability of an issuer to redeem a security before its maturity, while "noncallable" indicates the opposite.

Synonyms:

• Fixed-income security (broader term)
• Non-redeemable bond (not commonly used but can convey a similar meaning)

Related Idioms and Phrasal Verbs:

• There are no specific idioms or phrasal verbs directly related to "noncallable bond," but understanding terms like "cash in" (to redeem an investment) can be helpful in this context.

Conclusion:

Understanding the concept of a noncallable bond is essential for anyone interested in investing in bonds.

Academic

Noun

1. a bond containing a provision that the holder cannot redeem the security before a specific date (usually at maturity)