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Bearer Bonds

Category — Issue Parameters

A bearer bond is a security that is owned by the holder or bearer and not by the registered owner. Interest coupons are physically attached to the security, so the owner of the bond must present the bond directly in order to receive coupon payments. Like registered bonds, bearer bonds are negotiable instruments with a fixed maturity date and coupon rate.

An individual can buy any number of bearer bonds, present coupons for payment, and remain anonymous because the bonds are not registered in the owner’s name. For example, bearer bonds have all but disappeared in the US and some other countries, as their lack of registration has made them ideal for money laundering, tax evasion, and many other underhanded transactions. They are also significantly more vulnerable to theft than registered bonds.

Bearer bond example: Landesbank Baden-Wuerttemberg (LBBW), 1% 7dec2026, EUR DE000LB1M0R8
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