What are bonds & how to begin investing ?
What are Bonds? Bonds are debt securities issued by governments, municipalities, and corporations to raise capital. When you invest in bonds, you are essentially lending money to the issuer in exchange for regular interest payments and the return of the principal amount at maturity. Here are some key characteristics of bonds: Issuer : The entity, such as a government or corporation, that issues the bond to raise funds. Face Value : The face value, also known as the par value or principal, represents the amount borrowed by the issuer and the amount that will be repaid to the bondholder at maturity. Coupon Rate : The coupon rate is the fixed interest rate paid by the issuer to the bondholder. It is usually expressed as a percentage of the bond's face value and determines the regular interest payments. Maturity Date : The maturity date is the date on which the issuer will repay the face value of the bond to the bondholder. Bonds can have short-term (less than one year), medium-term (o