Bonds definition

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Bonds are a form of financial investment that involve lending money to an institution for a fixed period of time. They usually come in two varieties: corporate bonds and government bonds, depending on the type of institution you are lending to.

The bond will contain details of its interest rate (known as its coupon) from the outset. Since your initial investment is returned to you after the period of the bond expires (called the maturity date), this is the only profit that bonds pay.

Bond values are set at a par, typically either $100 or $1,000. This represents the face value, or amount that the initial investment will be worth at the bond’s maturity. Interest rates are a calculation of the credit status of the issuer and duration of the loan.

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Bonds tend to be more popular during periods when interest rates are low, as they offer a more attractive destination for savings. Find out more about trading on from bond prices with IG.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.