Bonds are fixed-income securities where investors lend money to issuers (government or companies) for interest income and principal repayment at maturity.
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A Bond is a fixed-income financial instrument that represents a loan made by an investor to a borrower, typically a government, corporation, or financial institution. In return, the issuer agrees to pay periodic interest (coupon payments) and repay the principal amount at maturity. Bonds are considered less risky than stocks, making them a popular choice for conservative investors seeking stable returns.
Bonds come in various types, such as government bonds, corporate bonds, municipal bonds, and convertible bonds. The price of a bond is influenced by interest rates, credit rating of the issuer, and market conditions.
Investors use bonds for capital preservation, income generation, and portfolio diversification. They are often traded in secondary markets, allowing liquidity before maturity.
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