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Take a few handy tips and avoid the traps in banking. Return to MAIN TIPS MENU Debentures
Check the credit rating of the issuer, this has a major impact on the interest rates offered on debentures. Higher returns usually mean a lower credit rating and a higher risk that you might lose your money. 2. Debentures can be traded Debentures can be traded. Investing in a debenture for a fixed term does not mean you are locked in for the whole period. Just like bonds, debentures can be re-sold. The price an existing debenture will attract depends on how its fixed interest rate compares to the rates being offered on new debenture issues. If rates have fallen since purchase, a debenture's resale value will be higher than what was paid for it because it offers a higher return than those available on new issues. 3. Do your homework on debenture rates Government policy, inflation and other economic variables can all affect the prevailing level of interest rates which in turn affect debenture rates and the resale value of debentures already on issue. Before committing to a debenture investment:
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