Following are the types of bonds:
- Floating Bonds - These bonds do not typically have fixed interest payouts for every period. In case benchmark rates change, so will the interest on the bond. The advantage of this is that if interest rates climb, so will your investment.
- Fixed Bonds - Bonds that give you a set and fixed amount of interest are fixed bonds and If the interest rates rise or fall, these factors do not affect your bond’s predetermined rate of interest.
- Perpetual Bonds - A perpetual bond is one that has no maturity. These bonds just pay the investor steady payments in perpetuity.
- Convertible Bonds - These are bonds that can be converted into equity shares of the company that issues them.
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