Corporate Bond Yield Versus 30 Year Treasury Rates  

        Most people consider investing in bonds because of the stability and income. If you see the past trends, it is seen that in any given year equity markets appreciate by nearly 30 to 40 percent or decline by the same percent. However, bonds (corporate bonds) tend to fluctuate far less then stocks.

       In addition, bonds offer a source of regular interest payments and you will receive checks either monthly or on a quarterly basis.

         With any investment, it is easy to lose money. When you invest in corporate bonds, you have to take an arithmetical calculation in account which will give details on corporate bond yield, returns as well as the risk involved. In order to find out whether a corporate bond is worth it, you should first know the basics. Corporate bonds usually offer fixed rate interest, which is also known as coupon rate. These bonds are for a fixed period of time and this is known as the maturity date. Bonds offer a fixed amount of interest until their maturity date and at that point the denomination is called face value. The face value is paid back to you and the interest payments from the company stop.

        Compared to Treasury bonds or any other sort of bonds, corporate bonds have a higher coupon rate. Corporate bonds’ maturity date can range from 1 year to 30 years. The 30 year corporate bond is similar to 30 year Treasury bond but the interest rates paid out to will differ in each case. What people have to realize that as long term bonds have increased risks, higher coupon rate is often paid.

        If you are a conservative investor and intend to hold the bond for its full term then Treasury bond is the best option for you. When you compare corporate bond yield and 30-year Treasury bond rates, the chances of getting a better yield from corporate bonds is higher especially when you end up purchasing Treasury bonds when interest rates are low as you will be stuck with low yield.

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Corporate Bond Yield Versus 30 Year Treasury Rates




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