These are securities promising to pay specified amounts to investors on specified dates. They come with less returns on ‘no risk’ as returns are guaranteed by the issuer to investors. in financial market there is a circular flow of funds looking for where to produce better returns because every investment is against expectation.
Example of fixed income securities or instruments are: Sovereign, sub-national and corporate bonds, Treasury bills, fixed deposit in the money market.
Some fixed income securities like bonds, are traded in the primary and secondary market platforms like: the Nigerian Stock Exchange (NSE), FMDQ and NASD to give investors a window for easy and free exit at any time before the due date of the instrument, should the need arise.
For many investors, a promise to make the instrument tradeable is an additional incentive for participating in an offer.