The term annuity has different meanings in finance. For us, of particular interest is the observation of bonds in the securities field.

As this pension bonds and securities are referred to with a fixed interest rate.

Fixed interest in this case means that the nominal interest rate and therefore the interest paid per period over the entire period are the same.

YIELDS AND MATURITY OF PENSION PAPERS

Since the term annuity covers the securities sector various forms of bonds and other fixed income securities, the yield potential and maturity are very different.


Roughly one can be divided into short-term bonds, medium term and long-term bonds, with maturities of more than flow smoothly into one another and can be divided roughly as follows:

• short-term bonds
• Duration 1-5 years
• medium-term bonds
• Duration 5-10 years
• long-term bonds
• Duration> 10 years

Depending on the duration and type of bonds interest rates are achieved 3-8% per year. Bonds are long-running example, the category of fixed income and can even earn interest income of more than 8% per annum.

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