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?

More terms

Simple pricing plans

From 11 April, the FX fee charged when trading stocks priced in USD or EUR will change to 0.99% on our Basic plan, 0.59% on our Standard plan, and 0.39% on our Plus plan. 

From May, monthly subscription fees will change to £5.99 per month for our Standard plan and £11.99 per month for our Plus plan.

£0.00/mo

Accounts

GIA pink
General investment account

Benefits

  • Commission-free trades (other charges may apply. See full pricing table.)
  • Fractional US Shares
  • Access to more than 1,500 stocks, including the most popular shares and ETFs
£4.99/mo

Accounts

GIA white
General investment account
ISA
Stocks and shares ISA

Benefits
Everything in Basic, plus:

  • Full range of over 6,000 US, UK and EU stocks and ETFs
  • Automated order types
  • Advanced stock fundamentals
  • 1% on uninvested cash, up to a maximum of £2,000
£9.99/mo

Accounts

GIA white
General investment account
ISA
Stocks and shares ISA
SIPP white
Self-invested personal pension (SIPP)

Benefits
Everything in Standard, plus:

  • 3% on uninvested cash, up to a maximum of £4,000
  • Priority customer service
  • Freetrade Web beta

Download the app to start investing now



When you invest your capital is at risk.