In comparison to similar non-callable securities, callable securities have:

Callable securities have higher required and expected yields than non-callable securities primarily because of the additional risk associated with the call feature. When an investor purchases a callable security, they are essentially taking on the risk that the issuer may redeem the security before its maturity date, typically during periods of declining interest rates. If interest rates fall, the issuer is more likely to call the security to reissue debt at a lower cost. This situation can be disadvantageous for the investor, who may be left with reinvestment risk if they must reinvest the returned principal in a lower interest rate environment.

To compensate investors for this added risk of early redemption, callable securities therefore must offer a higher yield compared to non-callable securities, which do not have this call feature and thus provide more predictable cash flows. Investors typically demand this premium for the uncertainty surrounding the potential for early redemption, which justifies the higher required and expected yields of callable securities compared to their non-callable counterparts.