Some bonds are known as bearer bonds or coupon bonds. These bonds are not registered in the name of individual holders; instead, they are negotiable by whoever holds them.

To receive interest payments, the current holders simply clip off a coupon and redeem it at an authorized bank. Because coupon bonds do not offer much safety to the holder, most currently issued bonds are registered.

This means that the bonds are registered in the name of the holder and that all interest payments are made by the issuing company directly to the current bondholder.

True is a Certified Educator in Personal Finance (CEPF®), contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, his interview on CBS, or check out his speaker profile on the CFA Institute website.