Keeping Records

[lawman]

Have began buying individual corporate bonds, C.D.s and treasuries..Have about 20. I always print my confirmation and I keep a file for them. I place them in the order of maturity so that I can easily look and see when my next one will mature. Two questions.
1. How do you know when each one will pay interest?
2. How do you keep up with interest payments to ensure none are missed? (Do I even need to worry about this?)

 

[njhowie]

1. In nearly all cases, semi-annually on the maturity date. If it matures (for example) 7/5/2025 your interest payments will be Jan 5 and July 5 annually.

2. Depends how many bonds you have. If just a few, then just look at the transaction activity/history screen at your broker, and look for the interest payments. If you have lots, as I do, then make a spreadsheet and work off of that depending how you choose to organize it.

 

[audreyh1]

I do it all electronically, using Quicken and the online account history and position views from my brokerage. All buys, interest and sold or matured is entered in Quicken. I reconcile the brokerage statement with Quicken every month.

 

[sengsational]

You can know exactly what the cash flows for each issue, down to the exact day, and to the penny. At 20 issues, you could have a spreadsheet with dates down the left column and a column for each issue. Each bond's cash flows can go in it's column and you can use an XIRR formula to confirm the YTM that you bargained for when you bought it. I did this for the ladder I built for my mom. It's cool to know what the monthly statement will say in the future!

To answer 1., you look at the terms for the bond. They give you the rate and the schedule in the description of the bond. You just multiply the rate times the face value how many you own. And it's clear what dates they pay.

 

[lawman]

1. In nearly all cases, semi-annually on the maturity date. If it matures (for example) 7/5/2025 your interest payments will be Jan 5 and July 5 annually.

2. Depends how many bonds you have. If just a few, then just look at the transaction activity/history screen at your broker, and look for the interest payments. If you have lots, as I do, then make a spreadsheet and work off of that depending how you choose to organize it.

Spreadsheets are over my head..Have you ever failed to receive an interest payment? ( not including late payments)

 

[njhowie]

Have you ever failed to receive an interest payment? ( not including late payments)

Never. Unless there is a bankruptcy involved, or your bonds are rated BB or lower, you should not even consider a missed payment. Late payments do occur. Not frequently, but periodically.

 

[lawman]

Never. Unless there is a bankruptcy involved, or your bonds are rated BB or lower, you should not even consider a missed payment. Late payments do occur. Not frequently, but periodically.

Perfect! thanks..

 

[sengsational]

Spreadsheets are over my head..Have you ever failed to receive an interest payment? ( not including late payments)

LOL! I wish I had not written the post, above.

Maybe, when you buy a bond, you add it to a list, and make little check boxes to the right of the name..
as many check boxes as expected payments. Three years left, two payments a year... make 6 check boxes. But for any system you employ, if there is a discrepancy, it's a 99% chance or better, that the error is in your accounting. Which is to say "they're never wrong".

But I'd say "no" life is too short to worry about not getting a payment, especially when there are people out there who own the same issue keeping detailed spreadsheets.

 

[lawman]

LOL! I wish I had not written the post, above.

Maybe, when you buy a bond, you add it to a list, and make little check boxes to the right of the name..
as many check boxes as expected payments. Three years left, two payments a year... make 6 check boxes. But for any system you employ, if there is a discrepancy, it's a 99% chance or better, that the error is in your accounting. Which is to say "they're never wrong".

But I'd say "no" life is too short to worry about not getting a payment, especially when there are people out there who own the same issue keeping detailed spreadsheets.

Thanks! For 40 years I never failed to reconcile my checking account. For 40 years I never caught a bank mistake. Now I do well just to keep up with debits and credits..

 

[Freedom56]

If spreadsheets are over your head then put in your calendar as a reminder. With Schwab late payments are almost a certainty. They hold interest payments as long as possible because they can get away with it. Usually with Schwab it's one to three days late. There are no issues with TDA and Fidelity.

Get organized. When you manage your own portfolio you have to keep track of all interest payments. Late payments from the issuers are rare but the trustee DTC is known to delay payments and even short payments. Again they do it because they can get away with it. The longer they hold your money the more interest they can earn.

 

[The Cosmic Avenger]

Fidelity has a Fixed Income Analysis Tool that gives you an overview of when your bonds are paying interest and how much. Note the highlight, I could hover over each month and see the exact amount.

 

[jazz4cash]

My suggestion is to explore the tools on your broker’s (Schwab?)website. At Fido when I click on one of my bonds, I can see a list of all my bonds with interest and principal (cash flow) payments by month or yearly. Every statement also shows me a 12 month income projection so that is another place to track portfolio payments.

 

[lawman]

My suggestion is to explore the tools on your broker’s (Schwab?)website. At Fido when I click on one of my bonds, I can see a list of all my bonds with interest and principal (cash flow) payments by month or yearly. Every statement also shows me a 12 month income projection so that is another place to track portfolio payments.

That's cool..Schwab shows investment income but as far as I know it does not break down the payments.

 

[aja8888]

That's cool..Schwab shows investment income but as far as I know it does not break down the payments.

It breaks it down under the account details.