Most investors think a bond’s return is just its coupon.

And in a taxable account, that misunderstanding can quietly cost you thousands of dollars over time.

Today, I’m going to show you why two bonds with the exact same return before tax can deliver very different returns after tax — and why discount bonds often come out ahead.

  • 00:00 – Introduction
  • 00:30 – What Is a Bond? (Quick Refresher)
  • 00:52 – Discount vs. Par vs. Premium Bonds
  • 01:11 – Why Bond Prices Move
  • 02:00 – Coupon vs. Total Return
  • 02:28 – Simple Discount Bond Example
  • 02:55 – How Bonds Are Taxed in a Non-Registered Account
  • 03:22 – Comparing Three Bonds (Same Yield, Different Taxes)
  • 03:51 – Why Discount Bonds Win After Tax
  • 05:10 – Key Takeaway for Taxable Investors
  • 05:41 – Preview: BMO Discount Bond ETF (ZDB)

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