The three most important things that need to know before buying a bond at face value, expiration date and coupon. The nominal value of a title refers to the amount of money you receive when the bond reaches maturity. In other words, you get back your initial investment when the bond reaches maturity.
The expiry date is of course the date on which the connection will reach full value. On this day you will receive your initial investment plus the interest the money earned.
Corporate and State and local government bonds can be “called” before they reach maturity, to return when the company or the question of the initial investment of his government, together with the interest earned so far. Federal loans can not be called. ” The interest rate is the interest value you receive when the bond reaches maturity. This interest was written as a percentage, and you must use other information to know what the interest. A bond with face value of $ 2,000, you get a coupon of 5% would be $ 100 per year in adulthood. Since titles are not banks, but many people do not understand how to go about buying one. There are two ways this can happen.
You can use a broker or brokerage to buy for you or you can go directly to the government. If you use a broker, you will more than likely made a commission charged. If you are a broker, according to the lowest commissions!
Buy directly from the government is not as difficult as it was before. There is a program called Treasury Direct, you buy the titles and all titles will be held in a register that easy access. This lets you avoid using a broker or brokerage firm.