The bonds in your Bond Account will always be the original ten bonds you agreed to purchase when you opened your Bond Account unless you otherwise instruct Public Investing to adjust your allocation. In other words, when cash exceeds a balance of $100 and becomes available in your Bond Account – whether from a one-time deposit, recurring deposit, and/or the accumulation of enough cash from coupon payments – the bonds you will purchase pursuant to the Buy Order Methodology, discussed below, will be the last allocation of bonds you agreed to purchase, either when you opened your Bond Account or you subsequently agreed to updated the bond allocation.

Bonds are chosen by Public Investing for the Bond account using a number of factors. The purpose of the Bond Account is to provide investors with yield in excess of what might be available in risk-free assets such as Treasury bills. Consequently, the Bond Account will contain bonds that have both investment grade and high-yield credit ratings in order to have an effective yield greater than what might be available in a less risky or risk-free product. Bonds are selected based on their underlying liquidity, maturity, their yield, industry, their average spread, coupon dates, and whether there is a market for lots below $1000 par in the bond in order to allow for fractional bond purchases. Additionally, the bonds in the Bond Account are evaluated holistically to ensure that there is sufficient diversification across companies, industries, credit ratings, and other relevant factors in order to reduce the likelihood that multiple bonds may default simultaneously.

To decide which of the ten bonds to purchase next in a $100 par value amount, Public Investing uses the following Buy Order Methodology: Public Investing will buy the bond which you hold in your Bond Account in the lowest amount (measured in par value). If there are multiple bonds fitting that category, then the bond with the highest rating. And if there are multiple bonds in that category, the bond with the highest yield. If, after the first $100 par value of the bond identified pursuant to the Buy Order Methodology is purchased, there is sufficient cash to purchase $100 par value of the next bond (according to the Buy Order Methodology), Public Investing will purchase that next bond, and so on.

Any residual cash will remain in your Bond Account as cash until there is again sufficient additional funds to purchase additional bonds in your Bonds Account. If your Bond Account holds cash that is not sufficient to purchase the highest priority bond (as determined by the above Buy Order Methodology), that cash will remain as cash until it reaches an amount sufficient to make that purchase. This cash balance will not earn interest and will reduce your overall yield, but can be transferred out of the Bond Account to other interest bearing accounts such as Public’s High Yield Cash Account. We may change the Buy Order Methodology at any time. If we change that methodology, we will not use the updated Buy Order Methodology to purchase bonds for your Bond Account without getting your consent.

Public Investing will not rebalance your Bond Account or update your allocations in any way, unless you instruct us otherwise, except in instances of Corporate Actions, where you will be notified.

Diversification and asset allocation do not guarantee future returns or eliminate the risk of loss. 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.