What is a bond?

Learn what a bond is

When governments and companies want to raise money, they’ll often do so by issuing bonds.

Bonds are effectively promissory notes. In return for buying bonds, investors will receive the money they put in back, plus interest.
Investors usually buy bonds because they promise a fixed return, in the form of interest, that is supposed to be paid back at one or several preset dates.

As the interest rate paid on bonds is usually fixed and pre-set, it’s common for bonds to be referred to as ‘fixed-income’ investments. Today, not all bonds have a fixed interest rate. Many are now issued with variable or floating interest rates, which change over time.

Deep dive: What are bonds and why investors buy them?

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A summary of a company's finances, including its assets, liabilities and shareholder equity.
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Dividends

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Net Asset Value (NAV)

The value of a company's assets relative to the number of shares it has.
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After-hours trading

Trading outside of a stock exchange's opening hours.
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Interest Rate

The amount a lender charges for lending your money, or a borrower pays you for borrowing your money.
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Venture Capital Trust (VCT)

A listed company run by a fund manager, investing mainly in private companies.e.
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Clean price

The quoted price of a gilt, which excludes accrued interest
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American Depository Receipts (ADRs)

Tradeable assets that let Americans invest in overseas stocks using US laws and dollars.
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Gilt

What is a gilt?
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