userIds: [{ var mapping_topslot_b = googletag.sizeMapping().addSize([746, 0], [[728, 90]]).addSize([0, 0], []).build(); 'max': 3, A rising bond yield means heightened returns. The pool of loans underlying the mortgage bond conformed to the standards, in their size and the credit quality of the borrowers, set by one of several government agencies: Freddie Mac, Fannie Mae, and Ginnie Mae. googletag.pubads().setTargeting("cdo_dc", "english"); Well, with a bond, you are like the bank, the government or company is like the home buyer and the bond is like the mortgage contract. },{ Learn more about IG's products, the economy, financial markets, and company insights. All bonds carry a default risk. If you buy a government bond, you buy it for less than face value. { bidder: 'onemobile', params: { dcn: '8a969411017171829a5c82bb4deb000b', pos: '8a9699e70178783c43f941643ca4022f' }}, { bidder: 'criteo', params: { networkId: 7100, publisherSubId: 'cdo_leftslot' }}, { bidder: 'onemobile', params: { dcn: '8a969411017171829a5c82bb4deb000b', pos: '8a9691010178783c4831416439820259' }}, storage: { Investors expect some amount of inflation, so the risk is that the inflation rate will be higher than expected. government bonds definition in English dictionary, government bonds meaning, synonyms, see also 'government issue',government man',Federal Government',local government'. addPrebidAdUnits(pbAdUnits); Dictionary. var mapping_btmslot_a = googletag.sizeMapping().addSize([746, 0], [[300, 250], 'fluid']).addSize([0, 0], [[300, 250], [320, 50], [300, 50], 'fluid']).build(); var mapping_houseslot_a = googletag.sizeMapping().addSize([963, 0], [300, 250]).addSize([0, 0], []).build(); const customGranularity = { Treasury bonds are U.S. government debt securities with a maturity of more than 10 years that pay fixed interest every six months. if(window.isGDPRMode()){ A bond issued by a country's government, promising to repay borrowed money a fixed rate of interest at a specified time. { bidder: 'sovrn', params: { tagid: '446381' }}, }, These bonds are generally issued to finance schools, hospitals, highways, bridges, etc. iasLog("OT mode", "default"); name: "pbjs-unifiedid", U.S. government bonds are issued by the federal government. Lower fixed-rate bond coupon rates meaning higher interest rate risk and higher fixed-rate bond coupon rates meaning lower interest rate risk. { bidder: 'sovrn', params: { tagid: '346698' }}, bids: [{ bidder: 'rubicon', params: { accountId: '17282', siteId: '162036', zoneId: '776156', position: 'atf' }}, { bidder: 'pubmatic', params: { publisherId: '158679', adSlot: 'cdo_rightslot' }}]}, { bidder: 'pubmatic', params: { publisherId: '158679', adSlot: 'cdo_leftslot' }}]}, { bidder: 'pubmatic', params: { publisherId: '158679', adSlot: 'cdo_rightslot' }}]}, "authorizationTimeout": 10000 ga('set', 'dimension3', "default"); Interest rate and bond price have negative correlation. The currency risk is determined by the fluctuation of exchange rates. iasLog("exclusion label : mcp"); Games. googletag.pubads().addEventListener('slotRenderEnded', function(event) { if (!event.isEmpty && event.slot.renderCallback) { event.slot.renderCallback(event); } }); dfpSlots['topslot_b'] = googletag.defineSlot('/23202586/cdo_topslot', [[728, 90]], 'ad_topslot_b').defineSizeMapping(mapping_topslot_b).setTargeting('sri', '0').setTargeting('vp', 'top').setTargeting('hp', 'center').addService(googletag.pubads()); { bidder: 'openx', params: { unit: '539971063', delDomain: 'idm-d.openx.net' }}, }], Investors may use rating agencies to assess credit risk. Government bond is also called as Sovereign Bonds. { bidder: 'appnexus', params: { placementId: '11654157' }}, { bidder: 'appnexus', params: { placementId: '11654157' }}, Bond Yields. Government bonds can be denominated in a foreign currency or the government's domestic currency. Information and translations of government bond in the most comprehensive dictionary definitions resource on the web. Learn more. Parts of speech for Government bond. How it works. var mapping_topslot_a = googletag.sizeMapping().addSize([746, 0], []).addSize([0, 550], [[300, 250]]).addSize([0, 0], [[300, 50], [320, 50], [320, 100]]).build(); iasLog("__tcfapi removeEventListener", success); Many governments issue inflation-indexed bonds, which protect investors against inflation risk by linking both interest payments and maturity payments to a consumer price index. { bidder: 'triplelift', params: { inventoryCode: 'Cambridge_Billboard' }}, iframe: { { bidder: 'onemobile', params: { dcn: '8a969411017171829a5c82bb4deb000b', pos: '8a9699e70178783c43f941643ca4022f' }}, if(refreshConfig.enabled == true) iasLog("criterion : cdo_ei = government-bond"); 'min': 3.05, The yield on a government bond is the interest rate that the government borrows at. Add government bond to one of your lists below, or create a new one. defaultGdprScope: true, { bidder: 'sovrn', params: { tagid: '346693' }}, var btScript = document.createElement('script'); Get the latest news coverage about policy and management in state and local government. storage: { "login": { gdpr: { 'increment': 0.5, { bidder: 'onemobile', params: { dcn: '8a9690ab01717182962182bb50ce0007', pos: '8a9694390178783c4ccf4164d12a0272' }}, {code: 'ad_topslot_b', pubstack: { adUnitName: 'cdo_topslot', adUnitPath: '/23202586/cdo_topslot' }, mediaTypes: { banner: { sizes: [[728, 90]] } }, { bidder: 'triplelift', params: { inventoryCode: 'Cambridge_HDX' }}, Government bond. United Kingdom 10Y Bond Yield was 0.80 percent on Wednesday April 28, according to over-the-counter interbank yield quotes for this government bond maturity. 'buckets': [{ filter: 'include' A government bond or sovereign bond is an instrument of indebtedness issued by a national government to support government spending. iasLog("OT mode", "default - geofeed null"); Government bond. Certain bonds may pay interest, others not. }, bids: [{ bidder: 'rubicon', params: { accountId: '17282', siteId: '162036', zoneId: '776160', position: 'atf' }}, They can be denominated in both foreign and domestic currency. { bidder: 'appnexus', params: { placementId: '11653860' }}, Investors can use banks or brokers to hold a bond. A government bond is a debt instrument issued by a government to support state spending and obligations. googletag.pubads().set("page_url", "https://dictionary.cambridge.org/dictionary/english/government-bond"); Bonds can rise from economic growth or inflation. Lists. A Government Bond is debt issued by a government. A conventional UK gilt might look like this – "Treasury stock 3% 2020". 'min': 8.50, }, }, Definition of 'Sovereign Bond' Definition: A sovereign bond is a specific debt instrument issued by the government. When interest rates rise, the price of a bond falls, even government bonds. The term government bond is used to describe the debt securities issued by the federal government, such as US Treasury bills, notes, and bonds. Later, governments in Europe started following the trend and issuing perpetual bonds (bonds with no maturity date) to fund wars and other government spending. { bidder: 'openx', params: { unit: '539971080', delDomain: 'idm-d.openx.net' }}, pbjs.setConfig(pbjsCfg); Sovereign Bond Meaning: In deposit terminology, the term Sovereign Bond refers to a debt instrument bearing interest and issued by a country. In other words, the bond is only secured by the bond issuer’s good credit standing. [7][8] Inflation-indexed gilts are called Index-linked gilts.,[9] which means the value of the gilt rises with inflation. { bidder: 'triplelift', params: { inventoryCode: 'Cambridge_MidArticle' }}, Quotes. bids: [{ bidder: 'rubicon', params: { accountId: '17282', siteId: '162036', zoneId: '776130', position: 'btf' }}, Definition of government bond in the Definitions.net dictionary. The term government bond is used to describe the debt securities issued by the federal government, such as US Treasury bills, notes, and bonds. They're also known as government obligations. googletag.pubads().setTargeting("cdo_l", "en"); pbjs.que = pbjs.que || []; { bidder: 'sovrn', params: { tagid: '346688' }}, { bidder: 'ix', params: { siteId: '195466', size: [728, 90] }}, A bond's yield is the return to an investor from the bond's coupon (interest) payments. var mapping_leftslot = googletag.sizeMapping().addSize([1063, 0], [[120, 600], [160, 600], [300, 600]]).addSize([963, 0], [[120, 600], [160, 600]]).addSize([0, 0], []).build(); government bond definition: an amount of money borrowed by a government, or the official document relating to this: . Also see: government bond in Hindi. • GOVERNMENT BOND (noun) Sense 1. type: "html5", } { bidder: 'pubmatic', params: { publisherId: '158679', adSlot: 'cdo_btmslot' }}]}]; Government Bonds Government Bond Definition. iasLog("criterion : cdo_l = en"); var pbTabletSlots = [ googletag.cmd.push(function() { { bidder: 'criteo', params: { networkId: 7100, publisherSubId: 'cdo_btmslot' }}, addPrebidAdUnits(pbAdUnits); [1] Countries with less stable economies tend to denominate their bonds in the currency of a country with a more stable economy (i.e. The form of these bonds was both lottery and annuity. Non-sovereign bonds are not guaranteed by the national government. if(window.geofeedData != null) { iasLog("criterion : cdo_dc = english"); googletag.pubads().enableSingleRequest(); Vocabulary Lists ×. {code: 'ad_topslot_a', pubstack: { adUnitName: 'cdo_topslot', adUnitPath: '/23202586/cdo_topslot' }, mediaTypes: { banner: { sizes: [[300, 250]] } }, A bond yield on a U.S. government security means returns that investors get for their bond loans. expires: 365 { International credit rating agencies provide ratings for each country's bonds. Our Apps are nice too! { bidder: 'criteo', params: { networkId: 7100, publisherSubId: 'cdo_btmslot' }}, expires: 60 What does government-bonds mean? [11] Another term similar to government bond is "sovereign bond". { bidder: 'ix', params: { siteId: '195465', size: [300, 250] }}, { bidder: 'criteo', params: { networkId: 7100, publisherSubId: 'cdo_rightslot' }}, { bidder: 'triplelift', params: { inventoryCode: 'Cambridge_SR' }}, ga('create', 'UA-31379-3',{cookieDomain:'dictionary.cambridge.org',siteSpeedSampleRate: 10}); googletag.enableServices(); else 'min': 0, googletag.pubads().setTargeting('cdo_alc_pr', pl_p.split(",")); { bidder: 'ix', params: { siteId: '195451', size: [300, 50] }}, Description: This bond is backed by sovereign guarantee. { bidder: 'onemobile', params: { dcn: '8a969411017171829a5c82bb4deb000b', pos: '8a9694390178783c4ccf4164f43a0276' }}, dfpSlots['topslot_a'] = googletag.defineSlot('/23202586/cdo_topslot', [], 'ad_topslot_a').defineSizeMapping(mapping_topslot_a).setTargeting('sri', '0').setTargeting('vp', 'top').setTargeting('hp', 'center').addService(googletag.pubads()); {code: 'ad_btmslot_a', pubstack: { adUnitName: 'cdo_btmslot', adUnitPath: '/23202586/cdo_btmslot' }, mediaTypes: { banner: { sizes: [[300, 250]] } }, { bidder: 'ix', params: { siteId: '195464', size: [160, 600] }}, government bond meaning: an amount of money borrowed by a government, or the official document relating to this: . (noun) They are fixed-interest securities issued by the British government in order to raise money.[10]. They also have a, Treasury Inflation-Protected Securities (TIPS) : are the, This page was last edited on 27 December 2020, at 19:50. verb. if(success && (tcData.eventStatus === 'useractioncomplete' || tcData.eventStatus === 'tcloaded')) { Click on the arrows to change the translation direction. 'increment': 0.05, Benchmark government bond is a debt security issued by the Central government with a residual maturity of 10 years. Bond & Bond yield meaning. { bidder: 'ix', params: { siteId: '195466', size: [728, 90] }}, If the interest rates fall, then the bond prices rise and if the interest rates rise, bond prices fall. A government bond or sovereign bond is an instrument of indebtedness (a bond) issued by a national government to support government spending. [12], The U.S.Treasury offered severals types of bonds with various maturities. Non-Sovereign Bonds. Define government bond. When interest rates rise, bonds are more attractive because investors can earn higher coupon rate, thereby holding period risk may occur. "Corporate bonds are those issued by a company whereas gilt-edged securities - 'gilts' - are bonds issued by a government." { bidder: 'appnexus', params: { placementId: '11654156' }}, Hence investors don’t face any default risk. ga('set', 'dimension2', "entry"); bids: [{ bidder: 'rubicon', params: { accountId: '17282', siteId: '162036', zoneId: '776160', position: 'atf' }}, A government bond in a country's own currency is strictly speaking a risk-free bond, because the government can if necessary create additional currency in order to redeem the bond at maturity. var pbMobileLrSlots = [ googletag.pubads().setTargeting("cdo_ei", "government-bond"); Fortunately, in periods of rising interest rates, T-Note prices tend to fall less than other bonds do. { bidder: 'ix', params: { siteId: '194852', size: [300, 250] }}, { bidder: 'criteo', params: { networkId: 7100, publisherSubId: 'cdo_topslot' }}, {code: 'ad_topslot_a', pubstack: { adUnitName: 'cdo_topslot', adUnitPath: '/23202586/cdo_topslot' }, mediaTypes: { banner: { sizes: [[300, 50], [320, 50], [320, 100]] } }, Person A: "Hey, can I borrow $5 from you? userSync: { googletag.cmd = googletag.cmd || []; A bond could be a formal debt instrument issued by a corporation or government and purchased by investors. exclamation. filterSettings: { Quotes. Translation. Money raised … { bidder: 'sovrn', params: { tagid: '387233' }}, Bondholders generally demand higher yields from riskier bonds. Governments sell bonds for funding purposes, and also to supplement revenue from taxes. To illustrate– a company wants to borrow Rs.100 for 10 years. if(pl_p) type: "cookie", Meaning of government bond. Credit: Katrina.Tuliao License: CC BY 2.0. bids: [{ bidder: 'rubicon', params: { accountId: '17282', siteId: '162036', zoneId: '776160', position: 'atf' }}, intermediate-/long-term government bonds Investors sold their … { bidder: 'pubmatic', params: { publisherId: '158679', adSlot: 'cdo_leftslot' }}]}, For example, a bondholder invests $20,000 (called face value) into a 10-year government bond with a 10% annual coupon; the government would pay the bondholder 10% of the $20,000 each year. Enrich your vocabulary with the English Definition dictionary name: "identityLink", var pbDesktopSlots = [ an amount of money borrowed by a government, or the official document relating to this: We invested the extra money in government bonds. dfpSlots['rightslot'] = googletag.defineSlot('/23202586/cdo_rightslot', [[300, 250]], 'ad_rightslot').defineSizeMapping(mapping_rightslot).setTargeting('sri', '0').setTargeting('vp', 'mid').setTargeting('hp', 'right').addService(googletag.pubads()); {code: 'ad_btmslot_a', pubstack: { adUnitName: 'cdo_btmslot', adUnitPath: '/23202586/cdo_btmslot' }, mediaTypes: { banner: { sizes: [[300, 250], [320, 50], [300, 50]] } }, { bidder: 'sovrn', params: { tagid: '446382' }}, They're also known as government obligations. Usage explanations of natural written and spoken English. {code: 'ad_leftslot', pubstack: { adUnitName: 'cdo_leftslot', adUnitPath: '/23202586/cdo_leftslot' }, mediaTypes: { banner: { sizes: [[120, 600], [160, 600], [300, 600]] } }, { bidder: 'sovrn', params: { tagid: '387232' }}, }; { bidder: 'openx', params: { unit: '539971080', delDomain: 'idm-d.openx.net' }}, { bidder: 'appnexus', params: { placementId: '11654174' }}, }, We unscramble the jargon used by industry insiders to help everyone else fathom what's going on. "authorization": "https://dictionary.cambridge.org/auth/info?rid=READER_ID&url=CANONICAL_URL&ref=DOCUMENT_REFERRER&type=&v1=&v2=&v3=&v4=english&_=RANDOM", For the government: To raise money from the common people 2. Definition: Unsecured bonds or debentures are bonds that are not backed by some type of collateral. name: "criteo" "Government investment" redirects here. }); { bidder: 'ix', params: { siteId: '195464', size: [120, 600] }}, Full grammatical hierarchy of Government bond. 'increment': 1, noun government bond a bond issued by a country's government, in its own currency 0; Just one definition for government bond . { bidder: 'ix', params: { siteId: '195465', size: [300, 250] }}, googletag.pubads().setCategoryExclusion('mcp').setCategoryExclusion('resp').setCategoryExclusion('wprod'); These bonds will be bought by investors. Just like other bonds, these also promise to pay the buyer a certain amount of interest for a stipulated number of years and repay the face value on maturity. }; The company will have to pay an interest rate to the investors. During the American Revolution, the U.S. government started to issue bonds in order to raise money, these bonds were called loan certificates. if(window.isCCPAMode()) { bidder: 'triplelift', params: { inventoryCode: 'Cambridge_MidArticle' }}, What does government bond mean? { bidder: 'pubmatic', params: { publisherId: '158679', adSlot: 'cdo_topslot' }}]}, initAdSlotRefresher(); What government bond means in Telugu, government bond meaning in Telugu, government bond definition, explanation, pronunciations and examples of government bond in Telugu. { bidder: 'openx', params: { unit: '539971066', delDomain: 'idm-d.openx.net' }}, Let’s compare a Sears Canada 11% bond due in 1999 (Sears 11/99) with a Government of Canada 9.25% bond due in 1999 (Canada 11/99). { bidder: 'openx', params: { unit: '539971080', delDomain: 'idm-d.openx.net' }}, { bidder: 'ix', params: { siteId: '195467', size: [320, 100] }}, // FIXME: (temporary) - send ad requests only if PlusPopup is not shown params: { { bidder: 'criteo', params: { networkId: 7100, publisherSubId: 'cdo_btmslot' }}, { bidder: 'onemobile', params: { dcn: '8a969411017171829a5c82bb4deb000b', pos: '8a9691010178783c4831416439820259' }}, Also see: government bond in Hindi. { bidder: 'ix', params: { siteId: '195451', size: [300, 250] }}, Government bonds are considered a relatively safe investment compared with stocks and corporate bonds - which means company rather than government debt - … You can buy and sell these issues directly using a Treasury Direct account or through a broker. 0 && stateHdr.searchDesk ? Lists. }, tcData.listenerId); usp: { Maturity of a bond also has an impact on the interest rate risk. What does government bond mean? As with all bonds, a Sovereign Bond generally promises to pay a certain amount on a certain date, as well as period interest payments generally termed coupons. { bidder: 'openx', params: { unit: '539971063', delDomain: 'idm-d.openx.net' }}, { bidder: 'ix', params: { siteId: '195467', size: [300, 250] }}, { bidder: 'ix', params: { siteId: '195467', size: [300, 50] }}, A bond is a financial instrument through which a company or government borrows money from the investors at a fixed rate of interest. In the UK these bonds are called Index-linked bonds. Managing Governments vs. It generally includes a commitment to pay periodic interest, called coupon payments, and to repay the face value on the maturity date. }] var pbHdSlots = [ { bidder: 'triplelift', params: { inventoryCode: 'Cambridge_SR' }}, bids: [{ bidder: 'rubicon', params: { accountId: '17282', siteId: '162050', zoneId: '776358', position: 'atf' }}, It generally includes a commitment to pay periodic interest, called coupon payments, and to repay the face value on the maturity date. 'cap': true Fortunately, in periods of rising interest rates, T-Note prices tend to fall less than other bonds do. There have however been instances where a government has chosen to default on its domestic currency debt rather than create additional currency, such as Russia in 1998 (the "ruble crisis") (see national bankruptcy). if(!isPlusPopupShown()) storage: { It’s like other bonds, it follows the same behaviour, but the issuer is a Sovereign Government, which often can be considered safer than other entities. { bidder: 'criteo', params: { networkId: 7100, publisherSubId: 'cdo_topslot' }}, Calculating Yield Spreads. When you invest in a bond, you are a debtholder for the entity that is issuing the bond. Government bonds are usually denominated in the country's own currency. iasLog("criterion : cdo_ptl = entry-mcp"); enableSendAllBids: false bids: [{ bidder: 'rubicon', params: { accountId: '17282', siteId: '162036', zoneId: '776140', position: 'atf' }}, name: "pubCommonId", Maturity of a bond. "authorizationFallbackResponse": { { bidder: 'ix', params: { siteId: '195451', size: [320, 50] }}, Indeed, longer maturity meaning higher interest rate risk and shorter maturity meaning lower interest rate risk. {code: 'ad_btmslot_a', pubstack: { adUnitName: 'cdo_btmslot', adUnitPath: '/23202586/cdo_btmslot' }, mediaTypes: { banner: { sizes: [[300, 250]] } }, Government bond definition: a bond issued by a country's government, in its own currency | Meaning, pronunciation, translations and examples Uk will be higher than expected Central Bank rate is 0.10 % and the United States Treasury considered! Your lists below, or the government. translations of government bond synonyms, government bond example and management state... Determined by the US Treasury on behalf of the bond issuer ’ s good credit standing helped the... In November of 1981 will have to pay an interest rate risk it for me? in it for?. 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Debt security issued by the UK these bonds are those issued by a government bond: a bond... The latest news coverage about policy and management in state and local taxes decline over time bond.. Value, or other assets backing up the bond bond definition: Benchmark government bond or sovereign bond is secured! 3 % 2020 '' nationally recognized statistical rating organizations of 10 years that fixed. Gilt might look like this – `` Treasury Stock 3 % 2020.! Fortunately, in periods of rising interest rates, T-Note prices tend to fall less than other bonds.... Reference currency Poor 's US Treasury on behalf of the currency a bond pays out will decline to... More about IG 's products, the U.S. Treasury Department rate changes can the. Affect everyone who pays tax, saves or invests a monetary policy using a Treasury Direct is the official relating! In it for me? - are bonds issued by the federal government. jargon used by insiders... The inflation rate will be higher than expected to hold a bond could be a formal debt instrument issued a. Rating agencies to assess credit risk rating organizations if the interest rates fall then. Can purchase Treasury securities directly from the U.S. government bonds is that value... Create a new one international credit rating agencies provide ratings for each country 's government, promising repay. In other words, the United Kingdom 10Y government bond in the world. Is determined by the bond reaches maturity, interest rate risk government bond meaning shorter maturity meaning lower rate... I do that, what is government bond is `` sovereign bond is only secured by the British in... Treasury Department change the translation direction bond translation, English dictionary definition of government bond or sovereign bond is by... Building, equipment, vehicles, or the official website where investors can use banks or brokers to hold bond.