Understanding the Basics of Bonds

Welcome to the world of bonds! Bonds are a fundamental component of the financial markets. They are instruments that signify a loan made by an investor to a borrower.

What is a Bond?

A bond is essentially a promise to repay the principal along with interest on a specified date. They are used by various entities, including corporations, municipalities, and governments, to finance operations.

Types of Bonds

Government Bonds: Issued by the government to support government spending.
Corporate Bonds: These are issued by corporations to raise funds for business activities.
Municipal Bonds: Issued by states or municipalities to fund public projects.

Why Invest in Bonds?

Investing in bonds can offer stability and predictability. They often provide regular interest payments and the return of principal upon maturity.