How to Gift Bonds?

Buying bonds is an investment method in which the investor gives a certain amount as a loan to a large company or a government, and in return, daily, monthly, or annual interest. Receives The purpose of governments and companies to sell bonds is usually to cover the budget deficit. In this article from the BearBullsClub site, we intend to first introduce the above investment bonds to you comprehensively and then answer the question, “How to give bonds as a gift?” let’s pay. If you are interested in learning more about this investment method, stay with us until the end.

In some cases, governments, companies, and municipalities issue bonds to the public in order to finance their needs.

Introduction of bonds

As mentioned in the previous paragraph, bonds are like contracts between investors and investors. According to these contracts, the investor undertakes to provide a certain amount of his capital to the investor. On the other hand, the investor also undertakes to pay the investor an amount for profit in specific periods.

These investment bonds are usually offered to the public to fund government projects, but the type of offering varies between countries. In some countries, bonds are only used to finance municipal projects, but in others, they are also issued at the government level.

Another point is that bonds or securities contain various information, such as the amount invested, the amount of interest paid, the date of interest payment, the terms of the loan, etc.

Common words in the text of bonds

In the text of bonds, specific terms and words are usually used. In the following, we will introduce these terms and vocabulary to you;

Calling: If an investment company’s interest rate decreases, it sells securities to avoid losses and increase its capital. This mode is called calling.
Convertibility of bonds: some securities can be converted into shares. Of course, the condition of converting these bonds into shares is the agreement of the investor and the investee.
Maturity date: The maturity date is the date on which the investor pays the interest of the investor. Most of the securities providers pay the interest of their investors in 6-month or one-year periods.
Possibility of sale: some securities are sellable, and investors can sell them before the maturity date. Of course, in such a situation, the interest rate of the company must have an increasing trend.
Bonds or guaranteed bonds: These bonds have financial backing, and investing in them is low risk. Usually, the bonds provided by governments are guaranteed and valid.
Unsecured bonds or loans: These bonds do not have financial support and their credit is limited only to the amount of credit of the investing company. The risk of investing in unsecured bonds is higher than the risk of investing in secured bonds.

Some bonds are sellable, but others are not transferable.

Can bonds be gifted?

People who are planning to get a gift for their loved ones usually prefer to buy something flashy, but there is a better way. The above people can provide valuable financial support as a gift to their relatives by buying bonds.

Of course, some people do not consider bonds a suitable gift because bonds consist of only one small sheet, but this way of thinking is completely wrong. This small piece of paper can become a very valuable asset in the future and completely change the life of the person receiving the gift.

Is it possible to transfer ownership of bonds?

The possibility of transferring bonds depends on the type of these bonds. Some bonds can transfer ownership, and others lack this ability. Therefore, if you intend to gift the bonds under your ownership to another person, first make sure that it is transferable.

Introduction of types of bonds

Securities or bonds can be placed in three different groups. Each of these bonds has different purchase conditions and is issued by a specific institution. Other groups of securities or loans include;

Government bonds or bonds: Governments of different countries usually offer bonds or bonds to the public when they face the problem of a lack of funds. The better a country’s economic situation, the lower the risk of investing in government securities.
Securities or corporate bonds: Some private companies issue bonds in order to secure the credit they need. The variety of corporate bonds is very high, but these bonds have a higher buying risk than government bonds.
Municipal bonds or bonds: Municipalities sometimes sell bonds to raise funds for construction projects.

You can give bonds as a valuable gift to your relatives and loved ones.

final word

In this article, we examined securities or loans comprehensively. If you intend to give your bonds as a gift to one of your relatives, it is better to make sure that they are transferable first.