Intermediate-Term Bond

Intermediate-Term Bond

A debt security with a maturity in the medium-term. While there is no set definition of what constitutes the medium-term, it is generally accepted that intermediate bonds are those that mature somewhere between one and 15 years. One of the most common intermediate bonds, the U.S. Treasury Note, usually has a maturity of 10 years. Intermediate bonds have become increasingly popular for what were formerly called long-term investors. This is especially true among Treasury securities; Treasury Notes have increasingly replaced Treasury Bonds as benchmarks of the bond market.

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Intermediate-term bond. Intermediate-term bonds mature in two to ten years from the date of issue. Typically, the interest on these bonds is greater than that on short-term bonds of similar quality but less than that on comparably rated long-term bonds.

Intermediate-term bonds work well in an investment strategy known as laddering. Laddering involves buying bonds with different maturity dates so that portions of your fixed income portfolio mature in a stepped pattern over a number of years.