Types of Securities
Debt securities - are securities that give their holder the right to receive fixed interest rates (income) and transferred to a refund in the amount of debt, carried out by a certain date. In Russia, the debt securities are dennymi:
Treasuries of the State;
savings certificates;
bills;
bonds.
We consider separately each type of debt securities. Treasury of the state - a kind of securities placed by the state. Buying Treasury Bill, the owner is making money in the budget of the state in exchange for it, for the duration of ownership of treasury bills, receives a fixed income, and at the end of this term gets invested amount back.
Savings certificates - a written certificate issued by the lending institution, the deposit of funds. Their investor is entitled to receive the deposit and interest thereon, but only when the term of the certificate of ownership comes to an end. Certificates may be bearer or registered shares.
Promissory note - a written promissory note completed by a strict form prescribed by the exchange. It gives the owner (note holder) an exclusive right upon the expiration of the obligation to demand from the drawer (the debtor) the payment of a sum of money specified in the bill.
Bonds - a kind of debt securities, which is the obligation of the issuer (the company that issued bonds) to return to the creditor (owner of the securities), the nominal value of its bonds as soon as the end in a timely manner. Also, the obligation of the issuer is a periodic payment to the creditor interest.
Issue is the way for the issuer to get a loan for a long time, and on favorable terms, without recourse to the bank. The holder also receives more than the bank deposit, interest, which is called the coupon (or coupons). To issue bonds may be banks, the state and its subjects, as well as private companies and businesses.
By purchasing a bond, the holder becomes the owner or part owner of the company. But this method of investing is very reliable, and here's why. The fact that payments on the bonds are made, even in the event of bankruptcy of the issuer. At the same time on the bonds is paid out in the first place, and payments for shares made after. In addition, bonds can be presented for early redemption, if such a situation was foreseen at placement. Smart buying of bonds involves the examination of the issuer's credit history, financial position and the company now and in the future, as well as the schedule of payments of interest on previous bonds. Bonds may be:
interest and interest-free;
registered and bearer;
freely traded, and with a limited circulation.
Interest income from the bonds can be paid coupons or redemption (redemption) of bonds. Consequently, the investor has two ways to buy bonds and get revenue:
to buy bonds at a discount (discount) to the nominal value by paying at the end of their face value;
buy the bonds at face value and receive regular coupon (interest from nominal) for the duration of treatment of the bond.
Since investing in bonds subject to a minimum the risks to the purchase of the bonds have resorted to long-term capital accumulation, or save it.
