What Are Annuity Bonds

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Annuity Bonds, also known as self liquidating bonds, are bonds that pay out a fixed sum every year till maturity.

This fixed payout incorporates both the interest payment and the principal repayment. The principal repayment is not made in lump-sum but throughout the tenure of the bond.

So for example, if you invest 100,000 in a 5 year Annuity Bond and get 25,000 each year, you’ve earned yourself an 8% interest per annum.

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Chartered Accountant with a passion for Blogging. You can reach out to me at ca.sandipan@gmail.com Twitter: @sanded28
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