Minimum Settlement Amount: Definition | Bondfish
Minimum settlement amount is the smallest face value of a bond that can be bought or sold in a single trade, set in the bond’s issue terms — often with fixed increments above it.
What it means
When a bond is issued, its terms define a minimum denomination (the smallest tradable piece) and an increment (the step size for larger trades). A bond with a minimum of 100,000 and increments of 1,000 can settle at 100,000, 101,000, 102,000 and so on — but never below 100,000.
Minimums vary widely. Government bonds aimed at retail investors often settle from 1,000 (or even less), while many corporate and institutional issues — especially in the eurobond market — set the minimum at 100,000 or 200,000, effectively reserving them for professional buyers.
Why it matters for bond investors
The minimum settlement amount decides whether a bond is accessible to you at all, and how finely you can diversify. A portfolio of 100,000-minimum bonds requires far more capital to spread across issuers than one built from 1,000-minimum bonds. Always check the minimum (and the increment) before comparing yields — the highest-yielding bond on your screen is irrelevant if its minimum piece exceeds your budget.
Example
Bond terms: minimum 2,000 / increment 1,000
Allowed trade sizes (face value): 2,000 · 3,000 · 4,000 …
Cash needed at a market price of 98.50 for 2,000 face: ≈ 1,970 + accrued interest
Related terms
This definition is for general information only and is not investment advice. Bond investing involves risk, including possible loss of principal.