A bond is a loan that you, as an investor, provide to a government or a company. In return, you receive interest and get your original investment back at the end of the term. With a bond, you do not become a co-owner, but a lender.

With a bond, it is determined in advance how much interest you will receive and when you will get your money back.

When a government or company needs money, it can issue bonds instead of shares. Investors buy these bonds and thereby lend money. In return, the investor usually receives a fixed annual interest payment, also known as a coupon. At the end of the agreed term, the borrowed amount is repaid.

Bonds are often considered less risky than shares because the interest is fixed in advance. However, bonds can fluctuate in value, for example when market interest rates change or when the financial position of the issuing party deteriorates.

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