Bonds

• A bond is like loaning money to a bank, corporation or the government.
• Bonds are usually sold with a set amount of interest the borrower will pay (the interest rate).
• The borrower also sets the period of time they will pay interest before returning the money you loaned. This is known as the "life" of the bond.
• During the life of the bond, the market value of your loan may go up or down, depending on current economic factors.
• If you hold the bond until maturity, you will receive the original amount invested (par value).
• If you sell the bond before it matures, you may receive a little more, a little less or precisely the same amount that you put in, depending on what interest rates other borrowers are currently paying.