Municipal Bond Forum
Premium bonds put all invested dollars to work
I love your News and Perspectives and learn much from them. In your article, “Seek Out The Misunderstood Premium Bonds,” you said: “Remember, when buying a premium bond, every dollar invested is working at the stated yields, even the premium dollars.” Can you explain how the premium dollars are working at the stated yields?
James A. Klotz responds:
Yield calculations are computed using the total dollars invested. This is the reason all invested dollars are working at the stated yields, even the premium dollars.
Do you have specific criteria for bonds you’re looking for? Let us know and we’ll e-mail you bonds that fit your needs. There is no charge for this service.
The responses provided in this forum are meant to address specific questions posed by investors about their municipal bonds and to provide market insight for our general audience. Please note, your investments, objectives, results and experience may differ significantly. Our answers and any potential strategies discussed should not be construed as a solicitation to buy nor sell any security or investment product. All investing entails risk.