An investment in a bond has the potential to provide investors with a regular income stream. Many bonds also offer benefits not available from traditional interest-paying investments such as term deposits.
Interest rate securities can have the following advantages:
- pay a defined income stream
- return their face value at maturity
- enable you to diversify your investments
- are bought and sold on ASX
- may offer tax advantages
Different bonds can have very different characteristics. Investors should take care to inform themselves about the specific characteristics of a particular bond before making a decision to invest.
Investing via ASX's interest rate security market
ASX's interest rate security market gives investors easy access to a market where they can buy and sell bonds in the same way as they buy and sell shares.
The market provides investors and their advisers with ready access to information about the price, return (yield) and ratings of different bonds and facilitates comparisons with other interest rate products.
A list of interest rate securities and Exchange-traded Australian Government Bonds and their prices are published daily in the Australian Financial Review, as well as being available on the ASX website.