Bond Information
This page provides useful background information on investing in bonds. A bond is a type of investment where the investor (the bondholder) lends money to a borrower e.g. government, statutory authorities or a company (the issuer) which issues the bond. As proof that the issuer owes money to the bondholder, the bondholder gets a bond certificate from the issuer. This bond can be sold to another investor much like shares. In some ways, a bond is similar to a bank loan. The issuer pays the bondholder an agreed interest rate. Usually interest is paid in equal amounts (called coupons) throughout the life of the bond. The bond is for an agreed term (time period) which is always more than one year.
At the end of the term, the issuer pays the amount borrowed back to the bondholder. Inexperienced investors in particular are encouraged to consult a licensed investment adviser or broker for specific investment advice.