Also called a high-yield bond or speculative-grade bond. A bond issued by a company with a lower credit rating, indicating a higher risk of default. Because of the added risk, junk bonds pay higher interest rates to attract investors. See Credit Rating Agency, Default Risk, Investment-Grade
Glossary
Junk Bond
Your A‑to‑Z Glossary of Financial Terms
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- 401(k) Plan
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a
- ACA
- Accredited Investor
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b
- Balance Sheet
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c
- Call Option
- Capital Asset
- Capital Gain
- Capital Gains Tax Rate
- Capitalism
- Captive Agent
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- Cash Value
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- Checking Account
- Claim
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- Consumer Price Index
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- Credit
- Credit Bureau
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- Credit Repair
- Credit Report
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d
- Dealer
- Death Benefit
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- Debit Cards
- Debt
- Debt Securities
- Debt-to-Income Ratio
- Decedent IRA
- Decentralized Finance
- Deductible
- Deductible IRA
- Deduction
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- DeFi
- Defined Benefit Plan
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- Deflation
- Delta
- Depreciation
- Depression
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- Discretionary Expense
- Distributed Ledger Technology
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- Diversification
- Dividend
- Dollar Cost Averaging
- Down Payment
- Dread Disease Insurance
- Durable Power of Attorney
- Duration
e
- Earned Income
- Earned Income Tax Credit
- Earnings
- Economic Indicator
- Effective Tax Rate
- Efficient Frontier
- Elder Financial Abuse
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- Employee Benefit
- Employer Match
- Endowment Bias
- Endowment Fund
- Entrepreneurship
- Equifax
- Equities
- Equity
- Estate
- Estate Planning
- Estate Tax
- Exchange
- Exchange-Traded Fund
- Excise Tax
- Exclusion
- Executor
- Exemption
- Expenses
- Experian
- Exposome
f
- Face Value
- Fascism
- FDIC
- Fear
- Federal Deposit Insurance Corporation
- Federal Income Tax
- Federal Reserve
- Federal Revenue
- Fees
- FICA
- FICO
- Fiduciary
- Fiduciary Obligation
- Financial Abuse
- Financial Advisor
- Financial Firm
- Financial Industry Regulatory Authority
- Financial Literacy
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- Fitch
- Fixed Annuity
- Fixed Expense
- Fixed-Rate Mortgage
- Flexible Spending Account
- FOMO
- Foreclosure
- Foreign Exchange
- Forex
- Form 1040
- Framing Bias
- Futures Contracts
- FX
- FX Futures
g
- GDP
- Grantor
- Grantor Trust
- Greed
- Gross Domestic Product
- Gross Income
- Guaranteed Lifetime Income
- Guardian
h
- Harry Markowitz
- Health Care Power of Attorney
- Health Insurance
- Health Savings Account
- Healthspan
- Hedge
- Hedge Fund
- Heirs
- Herd Mentality Bias
- High-Deductible Health Plan
- High-Yield Bond
- Hindsight Bias
- Home Equity
- Home Equity Line of Credit
- Home Equity Loan
- Hospital Insurance
- Howey Test
i
- Illusion of Attention Bias
- Illusion of Control Bias
- Immediate Income Annuity
- In Force
- Income
- Income Tax
- Independent Insurance Agent
- Index Funds
- Index Investing
- Indirect Tax
- Individual Retirement Account
- Inflation
- Inflation Rate
- Inheritance Tax
- Inherited IRA
- Institutional Investors
- Insurance Agent
- Insurance Cap
- Insurance Claim
- Insurance Company
- Insurance Contract
- Insurance License
- Insurance Policy
- Insured
- Intangibles Tax
- Interest
- Interest Rate
- Interest Rate Risk
- Internal Revenue Code
- Internal Revenue Service
- Intuition Bias
- Investment Advisers Act of 1940
- Investment Advisor Representative
- Investment Bank
- Investment Contract
- Investment-Grade
- Investment Manager
- IRA
- IRS
- Issuer
j
- Joint and Survivor
- Junk Bond
k
- Key Person Insurance
- Kidnap and Ransom Insurance
l
- Lagging Indicator
- Landlord
- Lapse
- Large-cap
- Leading Indicator
- Liabilities
- Lien
- Life Expectancy
- Life Insurance
- Lifespan
- Liquid
- Liquidity
- Living Will
- Loan
- Loan Agreement
- Long-Term Capital Gains
- Long-Term Care
- Long-Term Care Insurance
- Longevity
- Loss Aversion
- Lump Sum
m
- Major Medical Insurance
- Marginal Tax Rate
- Market Capitalization
- Market Correction
- Market Sector
- Maturity
- Maturity Date
- Medicaid
- Medical Expense Insurance
- Medical Expenses
- Medicare
- Medicare Part A
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- Mental Accounting Bias
- Metaverse
- Mid-cap
- Modern Portfolio Theory
- Modified Adjusted Gross Income
- Money Manager
- Money Market Account
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- Moody’s
- Mortgage
- Mortgage-Backed Securities
- Mortgage Interest
- Municipal Bond
- Mutual Funds
n
- Nasdaq
- National Credit Union Administration
- Net Investment Income Tax
- Net Profit
- Net Worth
- New York Stock Exchange
- NGO
- Non-Deductible IRA
- Non-Discretionary Expense
o
- Obamacare
- Offshore Account
- Opportunity Cost
- Optimism Bias
- Options Contract
- Ordinary Income
- Ordinary Income Tax Rate
- Out of Force
- Out-of-pocket
- Over-the-Counter
- Overconfidence Bias
- Overtime Pay
p
- Passive Income
- Passive Management
- Pattern Recognition Bias
- Payroll Tax
- Pension
- Pension Fund
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- Permanent Life Insurance
- Personal Finance
- Pessimism Bias
- Picks and Shovels
- Policy Limit
- Policy Owner
- Portfolio Manager
- Power of Attorney
- Premium
- Premium
- Prenuptial Agreement
- Primary Beneficiary
- Principal
- Private Equity
- Private Mortgage Insurance
- Probate
- Profit
- Profit-Sharing Contribution
- Profit-Sharing Plan
- Proof of Stake
- Proof of Work
- Property and Casualty insurance
- Property Tax
- Proud Papa Bias
- Publicly Traded Company
- Purchasing Power
- Put Option
r
- Real Estate
- Real Estate Investment Trust
- Realized Capital Gain
- Rebalancing
- Recency Bias
- Recession
- Refinance
- Registered Investment Advisor
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- Rent
- Retirement Account
- Retirement Plan
- Retirement Planning
- Revenue
- RIA
- Risk
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- Rollover
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- Royalty
- Rule of 55
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s
- Salary
- Sales Tax
- Savings Account
- Schedule C
- Second Mortgage
- Secondary Beneficiary
- Securities
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- Self-Employment Earnings
- Self-Employment Tax
- Separation of Service
- Settlor
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- Shares
- Short-Term Capital Gains
- Single-Life Option
- SIPC
- Small-Cap
- Small Sample Size Bias
- Social Security
- Social Security Administration
- Socialism
- Soft Dollar Compensation
- S&P
- S&P 500 Stock Index
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- Speculative-Grade
- SPIVA Scorecard
- Spousal IRA
- Spread
- Stablecoins
- State Income Tax
- State Securities Regulator
- Status Quo Bias
- Stock
- Stock Exchange
- Stock Market
- Stockbroker
- Strike Price
- Student Loan
- Suitability
- Surrender
- Surrender Periods
- Surtax
t
- T-Bills
- T-Bonds
- T-Notes
- Tax Avoidance
- Tax Code
- Tax Credit
- Tax-Deductible
- Tax Deduction
- Tax Deferred
- Tax-Deferred
- Tax-Efficient
- Tax Evasion
- Tax Exclusions
- Tax Exemptions
- Tax-Free
- Tax-Loss Harvesting
- Tax Rate
- Tax Refunds
- Taxable Income
- Taxes
- Term Certain
- Term Life Insurance
- Thrift Saving Plan
- Tips
- Tokens
- Trades
- Traditional IRA
- TransUnion
- Travel Cancellation and Medical Evacuation Insurance
- Treasury Bills
- Treasury Bonds
- Treasury Notes
- Trip Insurance
- Trust
- Trustee
- Trustee-to-Trustee Transfer
- Trustor
- Tuition Prepayment Plan
u
- U.S. Securities and Exchange Commission
- Umbrella Liability Insurance
- Underwriting
- Unemployment Rate
- Universal Life Insurance
- Utmost Good Faith
v
- Value-Added Tax
- Variable Annuity
- Variable Expense
- Variable Life Insurance
- Volatility
w
- Wages
- Waiting Period
- Ward
- Wealth Management Industry
- Whole Life Insurance
- Will
y
- Yield
z
- Zero-Coupon Bonds