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.

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