Bond
InvestingA fixed-income investment where you lend money to an entity that pays you interest over a set period and returns the principal at maturity.
Example
Example: You buy a US Treasury bond for $10,000 with a 4.5% coupon rate and 10-year maturity. You receive $450/year in interest ($225 every 6 months) for 10 years. At maturity, you get your $10,000 back. Total return: $4,500 in interest plus your principal. If you sell before maturity and rates have risen, the bond market value may be below $10,000.