Bond
Financial term in the Investing category
Definition
A fixed-income investment where an investor loans money to an entity (government or corporation) that borrows the funds for a defined period at a fixed interest rate.
Related Terms
Stock
A share of ownership in a company. When you buy stock, you become a partial owner with potential to earn money through price appreciation and dividends.
Treasury Bond
A long-term (20-30 year) debt security issued by the US government. Considered one of the safest investments, pays interest semi-annually. Used to benchmark other interest rates.
Yield
The income return on an investment, expressed as a percentage. For bonds, it's the interest payment divided by the price. For stocks, it's the annual dividend divided by the stock price.
Frequently Asked Questions
What is Bond?
A fixed-income investment where an investor loans money to an entity (government or corporation) that borrows the funds for a defined period at a fixed interest rate.
Why is Bond important in personal finance?
Bond is an important investing concept that helps individuals make better financial decisions. Understanding Bond can improve your financial planning and help you achieve your money goals.
How does Bond relate to Stock?
Bond and Stock are related financial concepts. A share of ownership in a company. When you buy stock, you become a partial owner with potential to earn money through price appreciation and dividends.
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