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Longman Dictionary of Contemporary English
fixed income
▪ It is an illiquid asset which generates a fixed income depending on the stock's interest rate.
▪ Lower yields on fixed income securities make equities more attractive than money market instruments for many investors, analysts said.
▪ They pay a fixed income each year and promise to pay investors a set sum on a set date in the future.
fixed income

n. 1 (context finance English) Any type of investment under which the borrower/issuer is obliged to make payments of a fixed amount on a fixed schedule. 2 A personal income that does not vary over time, often predominantly from pensions or state benefits.

Fixed income

Fixed income refers to any type of investment under which the borrower or issuer is obliged to make payments of a fixed amount on a fixed schedule. For example, the borrower may have to pay interest at a fixed rate once a year, and to repay the principal amount on maturity. Fixed-income securities can be contrasted with equity securities - often referred to as stocks and shares - that create no obligation to pay dividends or any other form of income.

In order for a company to grow its business, it often must raise money - for example, to finance an acquisition; to buy equipment or land; or to invest in new product development. The terms on which investors will finance the company will depend on the risk profile of the company. The company can give up equity by issuing stock, or can promise to pay regular interest and repay the principal on the loan (bonds or bank loans). Fixed-income securities also trade differently than equities. Whereas equities, such as common stock, trade on exchanges or other established trading venues, many fixed-income securities trade over-the-counter on a principal basis.

The term "fixed" in "fixed income" refers to both the schedule of obligatory payments and the amount. "Fixed income securities" can be distinguished from inflation-indexed bonds, variable-interest rate notes, and the like. If an issuer misses a payment on a fixed income security, the issuer is in default, and depending on the relevant law and the structure of the security, the payees may be able to force the issuer into bankruptcy. In contrast, if a company misses a quarterly dividend to stock (non-fixed-income) shareholders, there is no violation of any payment covenant, and no default.

The term fixed income is also applied to a person's income that does not vary materially over time. This can include income derived from fixed-income investments such as bonds and preferred stocks or pensions that guarantee a fixed income. When pensioners or retirees are dependent on their pension as their dominant source of income, the term "fixed income" can also carry the implication that they have relatively limited discretionary income or have little financial freedom to make large or discretionary expenditures.

Usage examples of "fixed income".

In the Quaker faith the minister had no legitimacy other than his or her own behavior, and no fixed income other than what he or she could earn by hard work.

You can die on a fixed income at the Nelson, and the last sound you hear could well be the creaking of bedsprings over your head as some other helpless old loser jacks off.

And if you don't feel rich, the little old lady on a fixed income must feel still worse as she watches her dollar dwindle to its intrinsic value- high-quality paper.

The doctors, as salaried employees of the Provincial Health Service, had to make-do on a fixed income not much in excess of $35,000.