​When you buy a bond, you are making what is known as a fixed-income investment. You are effectively lending money to the issuer of the bond, whether it is a corporation, a government, or a government agency. The issuer of the bond pays you a predetermined—or fixed—amount of interest on a scheduled basis, and then pays the principal of your investment back to you at the bond’s maturity date.

Bonds can be issued with either a fixed interest rate or a floating or variable interest rate. Investors typically buy bonds because they provide a predictable income stream.

The resources below provide information on the features and risks of investing in bonds.