What is a Registered Bond?

A registered bond is a bond for which the issuing entity maintains a list of the owners and the interest paid. A registered bond may state the name of its owner on its face, and is only transferable with the owner's endorsement. This approach is useful for the issuer, since it can send dividend payments to bond owners based on its internal records. This is also a useful control, since it ensures that interest payments are only paid to the person associated with a bond.

Example of a Registered Bond

U.S. Treasury Bonds (T-bonds) issued by the U.S. Department of the Treasury are registered bonds. When you buy a T-bond, your ownership is recorded electronically through the TreasuryDirect system, which tracks the name and details of the bondholder. Interest payments are directly deposited into the bondholder’s bank account, and the bond cannot be transferred to another person without proper documentation and consent from the issuer.

Registered Bonds vs. Bearer Bonds

The reverse of a registered bond is a bearer bond, for which there is no owner record. The issuer of a bearer bond issues dividend payments to whoever holds the bond. Bearer bonds must be securely stored, since someone who steals them could collect dividend payments on them, and submit them for reimbursement on the maturity date.