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Bearer Bond

A bond which does not record its owner's name anywhere. Possession of the bond certificate is therefore the only proof of ownership, i.e. possession is everything.  That is why in the movies when the bearer bonds are stolen, everyone panics.  

Dividends are claimed by submitting a detachable coupon to the paying agent, who then issues a check to the bearer for that coupon's portion of the bond's annual interest.  One must keep in mind that the bonds are no better or worse than the entity issuing them, and while anonymity may be attractive, the buyer must carefully and professionally investigate the issuer prior to investment.

One can create a bearer bond by writing a check to "Cash" or to "Bearer," but if the check is lost or stolen it can be negotiated by anyone who has it in his possession.

In these cyber-days, digital bearer bonds have come into existence for a variety of private transactions.

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