Bond
A debt security where an investor loans money to a borrower for interest and the return of the principal. They are low-risk but offer lower returns.
More Details
A bond is a type of debt security that allows an investor to lend money to a government, municipality, or corporation in exchange for interest payments over a specified period of time. At the end of the bond's term, the issuer repays the principal amount of the loan to the investor.
Example
If you decide to invest in a 10-year U.S. Treasury bond, the U.S. government will issue the bond and promise to pay you a fixed amount of interest every year for 10 years. At the end of the 10-year term, the government will repay the principal amount of the loan to you.
Related Terms
Canceled Check
A physical check that has been paid by the bank and cannot be used again. It may be returned to the payer with their bank statement.
Checking Account
A type of bank account that allows the owner to deposit, withdraw, and manage their money using checks, debit cards, and electronic banking services.
Overdraft
A situation in which an account holder writes a check or makes an electronic transaction for more money than is available in their account.

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