Learn · Securities
Bond
A bond is a debt security through which an investor lends money to an issuer in exchange for promised interest and repayment terms.
Plain-English definition: A bond is a debt security through which an investor lends money to an issuer in exchange for promised interest and repayment terms.[1]
How the term is used
Bond prices can rise or fall before maturity. Interest rates, credit quality, call provisions, inflation, liquidity, and time remaining all affect value. A bond fund does not have one maturity date shared by every investor.[1]
What to check before relying on it
Read the issuer, maturity, coupon, yield measure, seniority, call features, currency, and credit risk together. A higher stated yield often comes with a risk or structural difference.
Example
When market interest rates rise, an existing fixed-rate bond may fall in price because newly issued bonds can offer more income for the same principal.
Sources
- FINRA: Bonds — bond structure, yield, prices, credit risk, and interest-rate risk. Accessed October 24, 2026.