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An insured bond is a municipal bond whose interest and principal payments are guaranteed by a triple-A rated bond insurer.
Insurance protects municipal bondholders against default by the issuer and protects bonds in case they're downgraded by ratings agencies, which can decrease market value.
Insured bonds generally offer a slightly lower rate of interest than uninsured bonds.Yahoo Finance - Cite This Source - This Definition
- Browse Related Terms: accrued interest, Bonds (Corporate), Coupon Rate, Debt, Full faith and credit, General obligation (GO) bond, Insured bond, Senior bond, Treasuries