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What Is A Bond?
By Seedly  •  December 30, 2019

Previously, we explored what a bear market means.

Now, let’s find out what bonds are.

You probably would’ve heard of people saying, “Put your money in bonds”, or “Bonds are safe”.

But before you make your financial decision and invest in bonds, it is crucial to understand what a bond actually is all about.

Source: tenor

In essence, a bond is like a loan issued by a company or government to an investor.

You are acting like a “lender”, and the company or government acts as a “borrower”. Bonds are another form of investment option, just like stocks

Bonds are commonly referred to as fixed-income securities. They work by paying back a regular amount, also known as the coupon rate, in return for the risk lenders take on.

Let’s take an example of a $10,000 bond with a 10-year maturity date and a coupon rate of

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By Seedly
Launched in 2016, Seedly helps users make smarter financial decisions with its budgeting app which allows its 40,000 users to sync up their financial accounts and better manage their cash-flow. Last year, we introduced a new community feature which allows users to crowdsource knowledge from peers before making a financial decision.
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