When you buy bonds, you loan money to a government or corporation.
In return for this loan, you receive interest payments twice a year until the end of the term of the bond.
There are certain definitions that you need to understand when it comes to buying bonds.
Let's take a closer look at what these terms are and how they work in relation to bonds…
The basics of bonds
Here are... ››› more
When you start delving into the world of bonds, one of the first things you may notice is that bonds come with their own ‘language'.
To gain a basic understanding of how bonds work, you need to get to grips with these terms.
So what do you need to know about bonds?
Read on to find out…
The fixed-income world of bonds
Around the world, governments and corporations issue bonds ... ››› more
The major reason for investors buying bonds is for the reliable income they provide. To make sure you're buying a bond with a good income, you need to be able to easily compare its performance with other income paying assets. To do this you need to calculate the yield. The yield is the income you get from a bond. So how can you calculate a bond's income yield? And are there any other useful yield ... ››› more
Bonds are a way for a company to raise money. By splitting the amount of money the company wants to raise and divvying that amount into individual bonds, it can sell these bonds to investors for a set period of time. Just like shares, it is possible to make money by buying bonds at a low price and then selling them at a higher one. But one of the main reasons people buy bonds is to get a reliable ... ››› more
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