What Is a Bond?

A bond is a fixed-income investment where an investor lends money to a borrower—typically a corporation or government—in exchange for regular interest payments and repayment at maturity.

Bond Overview

Bonds are a way for organizations to raise funds. When you buy a bond, you’re effectively lending money to the issuer. In return, you receive periodic interest payments (called coupon payments) and the face value of the bond when it matures. Bonds can vary in risk, return, and duration, and are often used in diversified investment portfolios to provide income and stability compared to stocks. Understanding how bonds work helps investors manage risk and earn predictable returns.

Key Points

• A bond is a loan you make to a government or company.
• In return, they pay you interest over time and repay the full amount later.
• Used to raise money for projects or operations.