A bond that belongs to the class of socially responsible bonds (or religiously responsible bonds so to speak). It is both an investment and a religion-serving vehicle. It dates back to more than a century and has been used by issuers as a source of finance for the construction and improvement of church property, which serves as the collateral for the bonds. Typically, church bond issues are private offerings, but some are open to subscription by the public. As church bonds are not actively traded, investors will not be able to sell them if they don’t want to hold them until maturity.

Characteristically, these bonds are callable, i.e., issuers have the right to call them in prematurely, potentially depriving investors of the opportunity to realize their full benefit.