Bonds

Bonds are debt securities issued by governments, municipalities, or corporations to raise capital. When you buy a bond, you are essentially lending money to the issuer in exchange for regular interest payments, called coupon payments, over a set period of time. At the end of this period, known as the bond’s maturity, the issuer repays the bond’s face value to the investor. Bonds are considered a safer investment compared to stocks, as they provide predictable income, though they typically offer lower returns. They are commonly used for preserving capital and generating steady income.