Redeemable Bonds: Meaning & Definition with Example

Redeemable bonds are those bonds which are returned back after few years. Redeemable bonds have certain maturity period on which the bonds are redeemed and bond holders get their investment back. Let's see this example, Suppose you bought a 5%, 10-years bond of ABC Company at par value of $1000.

In this example, the bond has fixed maturity period of 10 years. It means that you will receive regular coupon payment of $50 annually for 10 years and at the end of maturity you will get back your investment of $1000. This is a redeemable bond as it has certain maturity period.

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