Definition
Bonds are fixed-income investment instruments where you lend money to a government or a company for a specific period. In return, they pay you regular interest and return the original amount at the end of the term.
Example
If you buy a bond worth Rs 10,000 with an interest rate of 8%, you can earn about Rs 800 per year as interest. After the bond period ends, you will get your Rs 10,000 back.
Caution
Bonds are generally safer than stocks, but they are not risk-free. Factors like interest rate changes and the issuer’s financial condition can affect the bond’s value and returns.