We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What are Debt Securities?

By Jason C. Chavis
Updated May 17, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Debt securities are a type of financial platform in which an issuer, also known as a creditor, provides assets to a borrower with the intention of receiving a repayment of the funds. Basically, it is some form of contract that represents money owed to another party. Examples of this include different types of bonds, documents such as debentures, or even paper money issued by a bank or government. These securities are usually backed by some sort of legal standing; however, some countries do not regulate the practice and allow creditors to issue statements privately.

The concept of a debt security is important to the continued function of most of the worldwide economy. Those institutions with capital provide individuals and companies in need of funding with the ability to purchase goods and services on credit. The creditor then issues some sort of binding document designed to symbolize the debt accrued. These documents are considered to be worth a certain value, requiring the individual or group to repay the debt according to the terms of the agreement.

Debt securities can be traded much like goods, allowing them to represent potential economic value. In this way, a bank or private entity can issue some sort of credit, create a debt security document, and then sell it to another source for the right to collect the repayment value. These securities therefore essentially equate to the exchange of money.

Within the debt securities market, a number of different types of credit-based documents can be issued. Private debt securities are issued to a private entity by some sort of organization with the purpose of eventually being paid off with the addition of interest, such as a credit card account. Corporate debt securities are those which are issued to a company and represent a certain portion of that company's assets. Governments of all levels, from municipal to federal, issue such securities in the form of bonds. These are essentially promissory notes, which guarantee a repayment with interest to individuals after a certain period of time.

One of the most prevalent examples of a debt security is simply the currency issued by a federal government. In the United States, each piece of money represents a certain amount of debt held by the Federal Reserve. The centralized bank issues finances to the people of the United States through its government, specifically the Treasury department. These finances are represented by the paper and digital money that is transferred in exchange for goods and services by the private sector. Essentially, each dollar bill is equal to one dollar of debt held by the Federal Reserve, with the intention of accepting repayment by the people at some point in the future.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.