Loading the player...

What is a 'War Bond'

A war bond consists of debt securities issued by a government for the purpose of financing military operations during times of war. It is an emotional appeal to patriotic citizens to lend the government their money because these bonds offer a rate of return below the market rate.


At first they were called Defense Bonds and issued by the U.S. Government, but that name was changed to War Bonds after the Japanese attack on Pearl Harbor on Dec 7, 1941. The bonds were zero-coupon bonds that sold for 75% of their face value in denominations from $10 to $100,000. To get an idea of the relative value of a dollar in 1942, in current terms, something that cost $1.00 in 1942, would cost around $11.00 in 2002.

  1. Government Bond

  2. U.S. Savings Bonds

  3. Liberty Bond

    A type of bond issued by the U.S. government during World War ...
  4. War Damage Insurance Corporation

    A government financial protection arm created during World War ...
  5. Bond Resolution

  6. Bond Market

Related Articles
  1. Investing

    Explaining Government Bonds

    A government bond is a debt security a government issues.
  2. Financial Advisor

    Advising FAs: Explaining Bonds to a Client

  3. Investing

    Corporate Bonds: Advantages and Disadvantages

  4. Investing

    The Basics Of Bonds

  5. Investing

    5 Reasons to Invest in Municipal Bonds When the Fed Hikes Rates

  6. Investing

    U.S. Corporate Bonds: The Last Safe Place to Make Money

  7. Investing


  8. Investing

    Spice Up Your Portfolio With International Bonds

  9. Investing

    Six Biggest Bond Risks

  10. Investing

    5 Fixed Income Plays After the Fed Rate Increase



  3. What are the key factors that will cause a bond to trade as a premium bond?

    Learn about the primary factor that can cause bonds to trade at a premium, including how national interest rates affect bond ... Read Answer >>
  4. Why do interest rates tend to have an inverse relationship with bond prices?

Hot Definitions
  1. Life Insurance

  2. Price Elasticity Of Demand

  3. Market Capitalization

  4. Frexit

  5. Stop-Limit Order

  6. Down Round

Trading Center