What are fixed income securities?
Fixed-income securities are debt instruments that provide a return to investors in the form of periodic interest payments, usually called coupon payments, and a return of principal at maturity. Unlike variable-income securities, where payments change based on some underlying measures, usually interest rates, the payments of a fixed-income security are known in advance, set at a specific interest rate which does not change. The interest payments to investors are generally paid semi-annually, and the principal when the security matures.
Companies and governments offer fixed-income securities in order to raise money, often to fund new projects or raise money for operating expenses.
Fixed-income securities are usually low-risk, safe investments, guaranteed to provide a modest but reliable return upon maturity. The most common types of income securities are bonds, money-market funds and CDs, though some types of preferred stock are fixed-income, as well.
The U.S. Treasury guarantees government bonds, which makes them a very safe investment, though the return is low.
Use the databases listed below, with your NYPL library card, to research fixed-income securities.
