Best Bond Calculators
Best Bond Calculators – A Collection of Choice
We make savings in different forms. One of these is an investment in bonds. DaProfitClub brings you some of the best calculators to calculate your savings.
What are Bonds? – The Basics
Bonds are the loan taken by the companies or institutions from individuals. These are usually issued by big companies, governments, municipalities, states, etc. to ensure that their financial needs are fulfilled. There is a detailed agreement between the borrower and the lender which has all the terms of the loan stated in it. Using the money received from bonds, the government, institution, or company finances its projects.
The person who purchases the bonds is the creditor while the company, the institution that issues bonds is the borrower. There is an end date mentioned in the agreement which tells of the date when the borrower will return the money to the lender. Usually, the borrower will not only have to pay the principal amount but the amount of interest as well. This interest is of two types which are fixed and variable.
Bonds can be used as a tradeable asset and can be sold by the owner to any other person. The owner has the right to keep it or sell it to any other person. The borrowing institution is liable to pay back to the person who has the bond. Usually, bonds have fixed interest rates and the value of them can be determined by the person who owns them. Now, in the new instances, there are bonds of variable interest rates available.
The relationship between bond rates and interest rates is inverse. Either of these goes up and the other's value will fall. The maturity date of the bond determines whether the investor will draw their amount of money invested plus the interest or they will invest it back to the company. There are different reasons for the issuance of bonds.
Governments might issue them for funding of mega projects like dams, infrastructure development, or some other. This is because of the demand to raise funds that are not available otherwise. In the same manner, corporations, or companies issue bonds to ensure that their financial needs for new or ongoing projects are fulfilled. They will also issue bonds to ensure that the need for new equipment is fulfilled.
Understanding the Concept of Bonds
Bonds are mainly issued to ensure that the financial security of the corporation or institution is enhanced. They can create a balanced environment for the company or any other institution that has issued bonds. It shows the trust of lenders in the company and for this reason, it performs well in the market. Bonds are not usually understood well by even experienced investors.
It is the difference between the terms used in other types of investment and bonds. It has a complex vocabulary, and this makes it difficult to understand. In contrast to the vocabulary used in bonds, the process of bonds is very simple. There is nothing to be confused about once you get the complete idea of bonds.
Some basic terms about bonds are coupon rate, callability, tax status, and maturity. Bonds come with different types of risks and the investor needs to be careful about all these. Bonds are graded based on different factors and it is for this reason that their value varies. In usual cases, it is companies that issue bonds. This is to save themselves from the trouble of going to banks and paying huge interest rates.
Simply they offer bonds that are sold to individuals. The individuals get paid in form of a principal amount along with the interest on their money.
Benefits of Bonds
Bonds are beneficial to both company and the investor. The investor gets benefits in form of the interest they receive while the company saves itself from banks. Bonds provide a safe place for the money of an investor. If someone keeps their money in a bank or home, there are various risks related to it. But if it is invested in bonds, then there are virtually zero risks bound to it. It is safe and can be received back from the company when the investor needs it.
If you keep money at home or at the bank then it doesn't necessarily mean that it will bring you some returns. In contrast, if it is invested in form of bonds, it will definitely bring you returns. The returns in form of bonds are predictable and you can have an estimate of them based on the interest rate and principal amount.
It is a good option in comparison to the bank. This is because of the fact that interest rates on bonds are better than the sum you receive in a savings account in a bank. So, it gives you better returns in comparison to banks.
Calculation of Bonds Value
The valuation of a bond is based on three factors. These are coupon rate, maturity date, and the current price. Based on these factors, the value of the bond can be easily calculated.
Best Bond Calculators
We have brought you some of the best bond calculators which will help you calculate the value of your bonds.
DaProfitClub has a number of finance-related calculators in the 'Financial Calculators' section. Some of the bond calculators are Yield to Maturity Calculator, Zero Coupon Bond Calculator, Bond Yield Calculator, Bond Equivalent Yield Calculator, etc. All these calculators can be used for the valuation of different types of bonds. Along with that different aspects of a single type of bond can be calculated with these calculators.
These calculators are simple, and their UI is user-friendly. Based on our experts' experience it is one of the recommended sites for bond calculations.
- Bond Value Calculator
Bond Value calculator is an online calculator that will serve you in the calculation of bonds and their values. It is a free calculator and can be used for various calculations. It gives the users guidelines about the use of the calculator and also provides the formula. This is done to ensure that the user is able to calculate it manually as well.
Once you enter the required values, this calculator will calculate the current value of your bond.