What does "Puttable Upon Death Of Holder" mean when purchasing a CD online from a brokerage via a Joint-Tenant with Survivorship account? Who is the "holder" in that case? And what does "puttable" mean? That it can be converted to cash before maturity?
1 Answer
Puttable means that the oqner of the bond can redeem the bond (typically for face value) at some point in time or based on some event.
Puttable on death of holder means that if the bondholder dies, the bond can be redeemed to the issuer for face value rather than having to sell the bond or keep it until maturity.
Obviously if the bond can be sold for more than face value, it would be better to do that, or one may want to keep the bond instead.
It's not obvious if, in a joint account, there is a single bondholder or if both account owners have to die to redeem the bond. You might need to read the prospectus (or have a lawyer look at it) to determine if the bond can be redeemed if only one account holder dies.
