What is a Callable Bond?

A callable bond, also known as a redeemable bond, is a type of bond that gives the issuer the option to redeem the bond before its stated maturity date. This means that the issuer can choose to pay back the bond's principal amount to the investor before the bond's maturity date.

If a bond is called, the investor will receive the full face-value of the bond, as well as any interest payments that have accrued up until the call date.

The call date is the date on which the issuer has the option to redeem the bond. This date is specified in the bond's terms and conditions and can vary from bond to bond. It is important for investors to be aware of the call date when purchasing a callable bond, as it can affect the potential return on their investment.