Investing Basics · Financial education
What Is a Bond?
Quick answer: A bond is a debt security through which an investor lends money to an issuer under specified terms.
Understand the core concept
Bond issuers may include governments and companies. Terms can specify interest payments and a maturity date, but actual repayment depends on the issuer's ability to pay.
See how it works
Bond prices often move inversely to prevailing yields, though the relationships depend on duration, credit quality and embedded features.
Know the limitations
Credit risk, inflation risk, interest-rate risk and liquidity risk can affect returns. Some bonds are significantly riskier than others.
Put it into context
Bond funds hold portfolios of bonds and may not have a single maturity date that guarantees your invested principal is returned.
Try this yourself
Explain why a rise in market interest rates may reduce the price of an existing fixed-rate bond.
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Check the original sources
Investor.gov education · SEC EDGAR company filings · FINRA Investor Insights
Educational material, not personal financial or trading advice. Initial publication: October 8, 2026. This article is not a substitute for checking current broker rules or company disclosures.