investing

What is a bond?

 

What is a bond?

The Bankrate.com financial term of the day is: "Bond"

Bond -- B-O-N-D -- might also be spelled I-O-U. Corporations and the government borrow money from investors by selling them bonds, which are debt instruments that pay a fixed interest rate for a specific period of time. The principal is usually repaid when the time's up, at what's called the bond's "maturity date."
 
A bond is an investment, similar to stocks. But with stocks, you buy a piece of the company, whereas with bonds, you buy some of the company's debt.

For answers to all of your investing questions, visit the Investments section at Bankrate.com.

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