Amanda Stanhaus

Tag: maturity

Discount Bond

bond that is bought for less than its face value. It will pay its face value at maturity.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Guaranteed Investment Certificate

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Usually, I’m weary of guarantees. But, the CDIC is behind Guaranteed Investment Certificates (GICs), so I’m feeling good about my principal.

(click on the bold-faced vocab word:))

GICs are the Canadian equivalent of the U.S.’s Certificates of Deposit.

I invest a certain sum of money and can’t access it till it matures. I’m rewarded for my good non-withdrawing behavior with higher than usual interest payments.

There are a considerable amount of combos with my ability to choose time frame till maturity and interest payment frequency.

Ask your bank about the endless possibilities of GICs!

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(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

Boys:Men::Bonds:Maturity

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I’m glad I have reached the point in my life that I am not waiting for boys to mature into men, and instead I am waiting for my bonds to mature into money!

There are many types of bonds and I had a bit too much creative time on my hands, so below I describe them in their boy equivalents. Click on the bold for the classic definitions.

Callable bond: His ex-girlfriend takes him back.

Corporate bond: The well dressed, business type that meets me on time unless the market is hurting.

Coupon bond: Without fail, I’m given gifts twice a year.

Discount bond: He is still hurting from his last relationship, but if I stick it out I could be one lucky lady.

Government bond: The young politico raising money to make the world a better place.

Junk bond: Good at sweet talking $$ out of me. Not sure if I will every get my $$ back…but if I do, it will be much more than I gave him.

Premium bond: Top of the line trust funder.

Zero coupon bond: The type who gives no gifts, but I’m well-rewarded at the maturity.

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(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

Certificate of Deposit

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Bobbi’s husband is being relocated to europe. I know boo-hoo, Bobbi has to visit Europe regularly at the company’s expense.

But it’s going to be sad for these inseparable newlyweds to be separated for weeks at a time.

I tried to cheer her up with a new investment vehicle I recently learned about.

Bobbi could deposit a sum of money as a certificate of deposit (CD) and when it matures after a year she will get her $$ back, plus an extra cushy interest payment.

(click on the bold-faced vocab words:))

The withdrawal penalties, if she gets too tempted to use the $$, will keep Bobbi in check. Plus, if she buys it at a FDIC-insured bank, the CD itself is insured.

My unconventional cheering up worked! They are already planning their second honeymoon for when his year in Europe is over, fully-funded by their CD.

See, separation can be a good thing! It grows $$. And makes the heart grow fonder.

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(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

Bond

Bonds are not redeemable to meet James Bond. Bummer…

(click on the bold-faced vocab words:))

Instead, Uncle Sam is starving. He needs me to spot him some $$. A bond is a more official version of spotting $$.

I’ll get my $$ back when the bond matures.

A bond’s coming of age story includes semi-annual coupon payments until Uncle Sam returns my $$.

Companies also sell bonds. Corporate bonds are thought to be riskier than government bonds. A company cannot directly control its revenue and cash flow like a government can (i.e. tax policy and printing $$).

If the American Government is unable to pay me back, most likely we will have bigger problems on our hands (à la alien invasion). A space helmet could be a fun new accessory though!

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(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

Treasury Note

Backed by the full faith and credit of The US government. These bonds mature in 1 to 10 years. Bondholders receive semi-annual interest payments at a fixed interest rate.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Yield to Maturity

What will the rate of return be if the bond is held to maturity??

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Zero-Coupon Bond

Discount! The difference between the stated price ( at maturity) and the discount price is the $$ made.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)