Semiannual

What Is Semiannual?

Semiannual is a modifier that depicts something paid, reported, distributed, or in any case happens two times every year, commonly once like clockwork.

For instance, a ten-year general obligation bond issued by the Buckeye City, Ohio Consolidated School District in 2020 will pay interest on a semiannual basis every year until the bond's maturity date in 2030. Investors who buy these bonds will receive interest payments two times in every one of those years; in this case, once in June and once in December. The school district will likewise distribute a semiannual report on its finances, once in February and once in November.

Understanding Semiannual

Semiannual is basically a word that denotes an occurrence two times every year. For instance, a company could have company parties semiannually, a couple could praise their marriage semiannually, a family could take some time off semiannually. Whatever happens two times every year happens semiannually.

If a corporation pays a semiannual dividend to its shareholders, the shareholders will receive dividends two times yearly. (A corporation can pick the number of dividends to convey every year — if any.) Financial statements or reports are habitually distributed on a quarterly (four times each year) basis. It is rare that corporations distribute financial statements just semiannually. They do, be that as it may, distribute an annual report, which per the definition, happens once consistently.

Semiannual is important to comprehend while purchasing bonds. A bond is generally portrayed in the yield that it pays the bondholder. For instance, a $2,000 bond could have a yield of 5%. It is important to be aware if this 5% is paid annually or semiannually to comprehend the payment you would receive as the bondholder.

For instance, on the off chance that the bond paid the yield annually, the bondholder would receive $100 every year. Presently, on the off chance that the bond paid the yield semiannually, the bondholder would receive $200 every year. This is an important qualification to note while purchasing bonds.

U.S. Treasury bonds pay a yield semiannually.

Semiannual versus Biennial

While semiannual is a modifier that portrays something that happens two times in a single year, biennial is a word that depicts something that happens each and every other year. Justifiably, biennial is frequently mistaken for the word biannual, and that means exactly the same thing as semiannual: something that happens two times a year.

Illustration of Semiannual

Company ABC has performed well in the last five years, constantly creating a gain and developing earnings. The company concludes it will begin paying its shareholders dividends to disperse a portion of the earnings. ABC's management concludes it will circulate a dividend of $0.50 for each share.

It likewise concludes that the dividend will be distributed on a semiannual basis; the shareholders will receive one dividend payment of $0.50 two times per year for a total dividend amount of $1 for the year. The dividends will be distributed in June and in December.

Features

• U.S. Treasury bonds pay a yield semiannually.
• Interest payments on bonds can be distributed semiannually as can company dividends.
• Semiannual is a descriptive word that portrays something paid, reported, distributed, or in any case happens two times every year.
• Semiannual is frequently mistaken for the word biennial, and that means something that happens each and every other year.