Noncallable

When a bond is noncallable, the issuer cannot redeem it before the stated maturity date. Some bonds have call protection for their full term, and others for a fixed period - often ten years.

The appeal of a noncallable bond is that the issuer will pay interest at the stated coupon rate for the bond's full term. In contrast, if a bond is called, you receive a lump-sum repayment of principal, which you must reinvest.

Frequently, rates are lower at call that they were when the bond was issued, which means your reinvested principal will provide a smaller yield.