What does bond mean in English?

In English, the word "bond" relates to the etymology of "bind". The use of the word "bond" in this sense of an "instrument binding one to pay a sum to another" dates from at least the 1590s. Bonds are issued by public authorities, credit institutions, companies and supranational institutions in the primary markets.

What are bonds & how do they work?

What Are Bonds? Bonds are investment securities where an investor lends money to a company or a government for a set period of time, in exchange for regular interest payments. Once the bond reaches maturity, the bond issuer returns the investor’s money.

What is an individual bond?

An individual bond is a fragment of a massive loan. Essentially, bonds are a way for companies and governments to raise capital. When investors buy bonds, they lend to the issuer, who, in return, promises to pay the lender a specified interest rate during the bond’s life and to repay the principal at an agreed-upon time.

What is a government bond?

Bond definition: A bond is a loan to a company or government that pays investors a fixed rate of return over a specific timeframe. Bonds are a key ingredient in a balanced portfolio. Average returns: Long-term government bonds historically earn around 5% in average annual returns, versus the 10% historical average annual return of stocks.