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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Amortized Bond

Definition:

See amortization.

Let's say you buy an amortized bond that comes due in 10 years. It has a coupon of 7%. Over the course of its life, it will pay 10 x 7% x whatever the amount of issue of the bonds. After three years, the bonds will produce less cash for you than they did on the date when they were shiny and new. One way of accounting for that is to think of bonds as a depreciating asset.