Able to be redeemed prior to maturity. The term generally applies to bonds and convertible securities. The issuer of a callable security has to state the conditions under which the security may be called at the time of issue. For most securities, there is a certain initial time period in which the security cannot be called. A bond will generally be called when market interest rates fall below the yield being paid on the bond (bonds are generally called when the price rises to a certain point). To reflect this risk, a callable security is generally priced lower than a non-callable security.