Investing Tax Free

Investment Glossary


definition of investment terms

Many of the following definition of investment terms are used somewhere on this site, and all are used out there in the fast paced world of investing, whether it is a tax free investing or municipal bonds investing or other types of investing. Think of this as your place to get up to speed on financial and investing jargon! This investment glossary and definition of investment terms is for your resources.

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Accrued Interest - Interest earned since the last interest payment date. Accrued interest on bonds purchased in the secondary market is payable by the buyer of a bond to the seller. Municipal bonds trade "plus accrued interest."


Ad Valorem Tax - A tax based on the value (or assessed value) of property.


Alternative Minimum Tax - (or AMT) A federal tax aimed at ensuring that wealthy individuals, trusts, estates and corporations pay at least some income tax.


AMT Bond - (or AMT-Exposed Bond) A private activity bond issued after August 7, 1986, the interest from which is a preference item to be included in calculations of personal alternative minimum tax.





Basis Point - A shorthand reference to 1/100 of 1 percent (.01%) of yield.


Bearer Bond - A bond that has no identification as to ownership. Interest is payable upon receipt of detached semiannual coupons. Bearer bond issuance was terminated in 1983.


Bond - A debt contract, bearing interest, which promises to pay a principal amount due on a specific date.


Bond Anticipation Note - A municipal note issued in anticipation of later issuance of bonds, usually from the proceeds of the sale of the bonds anticipated or of renewal notes.


Book-Entry Bond - A bond that is held by a depository which remits interest and principal payments to owners as due. Beneficial ownership is evidenced by book entry only. Today, most bonds are issued in book entry form.

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