A Guide To Corporate Bonds

By Author: Lecia Selbo
Total Articles: 49
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Much of the media coverage of the credit crunch has been focused purely on looking at interest rates from the perspective of those in debt. However, those of us with savings are in need of guidance too.

One increasingly popular use for savings comes in the form of the corporate bond ? a kind of ''savings account'' that you may not have previously considered. Whilst interest rates are still rock bottom on many savings accounts, leaving your hard earned cash sitting around doing nothing for your financial gain, corporate investments have become an attractive, money making prospect.

Firstly, what is a corporate bond? The answer is that a corporate bond involves you investing your money into a particular business or organisation, with the hope of making some money on return. Essentially, you provide this organisation with capital and they show you why they believe you will make a profit from it.

The risk attached to such an investment will be different for each individual investor and each corporation involved in the transaction. If you are new to the corporate bond phenomenon, it is always advisable to seek ...
... advice from financial professionals or friends in the know before you commit.

Be sure of your requirements before you open any kind of bond with any company. Decide when it is that you want your original investment back and be clear about what you expect this investment to do for you. Bear in mind the speed with which the market is changing. If you are using corporate bonds as a replacement savings account, interest rates are now on the up once more.

For the company, the benefits are great. They are probably looking to expand or branch out into a slightly newer field, and as such require a bit of extra capital to make the changes. The changes will hopefully afford them greater profit making opportunities ? something in which you will be entitled to share.

And of course, your next question must be ''what is in it for me?'' Corporate bonds allow you to obtain interest from your investment that will be paid at regular intervals, decided at the outset. You will also, after a fixed period decided by you and your bond holder, be able to redeem the full value of your original investment, so it is a relatively safe way in which to invest.

Check out the latest coverage on corporate bonds by scanning the financial pages of online publications for further advice and information. Lecia Selbo opened his own corporate bonds with Legal