Bonds

Types of Bonds

U.S. Government Bonds

These bonds are direct debt obligations of the federal government. Most of the U.S. government bonds are marketable. However, Series EE and HH bonds are non-marketable.

Treasury STRIPS

These are U.S Treasury-issued bonds with two components: investment and repayment of principal. The components are separated and sold individually as zero-coupon bonds. STRIPS is an acronym for Separate Trading of Registered Interest and Principal Securities.

Corporate Bonds

A method for corporations to borrow money is to sell units of $1,000 debt obligations that the company must pay back with interest. Typically sold through bond dealers, interest on these bonds are paid semiannually and is expressed in the stated coupon rate as a percentage of the bond's face value.

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