Different Types of Bond and Here’s What They Mean

Bond is one of the types of instruments which is used to borrow money. It gives an assurance to the investor regarding his funds. Bonds are issued by many government organizations, corporations and private entities. Different types of bonds are issued by organizations generally for a longer period, say of more than one year to raise money by borrowing. In simpler words, a bond is generally a form of debt which the investors pay to those who require the sum for a defined time frame. The same generally have a fixed maturity date that is the final date for the payment of any financial product when the principal along with the interest needs to be paid to the investor by the issuer. All bonds are usually expected to pay the amount that they are required to by or after the maturity date. Bonds are commonly referred to as fixed income securities and are one of three asset classes individual investors are usually familiar with, along with stocks. It is not neces...