What is a bond? 👉 Definition: A bond is a loan from an investor (you) to a borrower such as a company or government. The borrower uses the money to fund its operations, and the investor receives interest on the investment. 👉 Benefit: Bonds are seen as less volatile and safer when compared to stocks, and when held to maturity, they can provide more consistent and stable returns. Bond interest rates are also generally higher than bank savings accounts, CDs, and money market accounts.
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