This document discusses different types of bonds. It begins by defining what a bond is, noting that a bond allows a lender to lend funds and receive interest payments. It then discusses characteristics of bonds like face value, coupon rate, maturity date, and issue price. The document goes on to describe several specific types of bonds, including fixed rate bonds, floating rate bonds, zero interest rate bonds, inflation linked bonds, perpetual bonds, subordinated bonds, bearer bonds, war bonds, and mortgage bonds.

1. TYPES OF BONDS
BY
SHREYAS S S
PES1PG21MB321

2. What is a bond?
 A bond is a fixed income security which allows a
lender to lend a predetermined amount of funds,
and be eligible for interest on these funds.
A Government bond is a financial security used by
the government of the country to mainly regulate
the volume of circulating cash in the economy.
Bonds are used by companies, municipalities,
states, and sovereign governments to finance
projects and operations.

3. Characteristics of Bonds
1. Face value (par value) is the money amount the bond will be worth at maturity; it is
also the reference amount the bond issuer uses when calculating interest
payments.
2. The coupon rate is the rate of interest the bond issuer will pay on the face value of
the bond, expressed as a percentage.
3. Coupon dates are the dates on which the bond issuer will make interest payments.
Payments can be made in any interval, but the standard is semiannual payments
4. The maturity date is the date on which the bond will mature and the bond issuer
will pay the bondholder the face value of the bond.
5. The issue price is the price at which the bond issuer originally sells the bonds. In
many cases, bonds are issued at par.

4. TYPES OF BOND
1. Fixed Rate Bonds
2. Floating Rate Bonds
3. Zero Interest Rate Bonds
4. Inflation Linked Bonds
5. Perpetual Bonds
6. Subordinated Bonds
7. Bearer Bonds
8. War Bonds
9. Mortgage Bond

5. 1. Fixed rate Bonds:
In Fixed Rate Bonds, the interest remains fixed through out the tenure of the bond. Owing to a
constant interest rate, fixed rate bonds are resistant to changes and fluctuations in the market
2. Floating rate Bonds:
Floating rate bonds have a fluctuating interest rate (coupons) as per the current market reference
rate. When the coupon rate keeps fluctuating during the course of an investment.
3. Zero rate Bonds:
Zero Interest Rate Bonds do not pay any regular interest to the investors. In such types of bonds,
issuers only pay the principal amount to the bond holders.

6. 4. Inflation Linked Bonds
Bonds linked to inflation are called inflation linked bonds. The interest rate of Inflation
linked bonds is generally lower than fixed rate bonds.
5. Perpetual Bonds
Bonds with no maturity dates are called perpetual bonds. Holders of perpetual bonds enjoy
interest throughout.
6. Subordinated Bonds
Bonds which are given less priority as compared to other bonds of the company in cases of a
close down are called subordinated bonds. In cases of liquidation, subordinated bonds are
given less importance as compared to senior bonds which are paid first.

7. 7. Bearer Bonds
Bearer Bonds do not carry the name of the bond holder and anyone who possesses the bond
certificate can claim the amount. If the bond certificate gets stolen or misplaced by the bond
holder, anyone else with the paper can claim the bond amount.
8. War Bonds
War Bonds are issued by any government to raise funds in cases of war.
9. Mortgage Bond:
The bonds which are backed up by the real estate companies and equipment are called
mortgage bonds.