Withdrawals and Selling Bonds
You can request a withdrawal from your Bond Account at any time. We will always use the available cash balance in your Bond Account first to fulfill your request.
If your requested withdrawal amount is greater than your Bond Account cash balance, bonds are sold to raise the necessary funds, following the Sell Order Methodology discussed below.
Sell Order Methodology
Public Investing will sell bonds in $100 par value increments. To determine which bonds to sell, Public Investing uses a clear and automated methodology which serves as your instruction for every sale. The Sell Order Methodology is as follows:
The methodology first looks at the target percentage you’ve set for each bond and compares it to your current holdings. It then identifies which bond has the largest surplus over its target allocation, measured in par value, and will sell that bond first to raise cash.
If there are multiple bonds fitting that category, we will sell the bond with the lowest credit rating.
If multiple bonds are overweight to target allocation by the same amount as well as have the same credit rating, we will sell the bond with the lowest yield at that time.
Sales are made in increments of approximately $100 par value. After each incremental sale, the Sell Order Methodology is automatically re-applied to determine which bond to sell next. This process continues until enough cash has been raised to meet your withdrawal request.
Any cash raised that is in excess of your withdrawal request will remain as cash in your Bond Account. This cash balance will not earn interest, but can be transferred out of the Bond Account to other interest-bearing accounts, such as Public’s High Yield Cash Account. The resulting yield of the portfolio may also change as the composition of the account changes.
Public Investing will not rebalance your Bond Account or adjust your holdings after a sale unless you instruct us otherwise, except in instances of Corporate Actions, where you will be notified.
Selling bonds involves risks. The price you receive for a bond depends on market conditions at the time of sale and may be more or less than what you paid, resulting in a gain or loss. All sales are subject to standard fees and/or mark-downs. For more on the risks of investing in bonds, see the Fractional Bond Disclosure, Fixed Income Disclosure and Bond Account Disclosure.
The Bond Account is not intended to ensure adequate diversification and you should conduct your own research and make your own determinations as to whether a particular investment aligns with your investment objectives, risk tolerance, and financial situation.
For further questions please contact Member Support via in-app chat or email at support@public.com.