📌 Definition:

A bond is a fixed-income investment where you lend money to a government or company for a specific period in exchange for regular interest payments.

When you buy a bond, you are acting like a lender.

🏦 Who issues bonds:

• governments

• corporations

• municipalities

Examples include bonds issued by the Government of India or companies like Reliance Industries.

💰 How bonds work:

• you invest money

• issuer uses that money

• issuer pays interest regularly

• principal is returned at maturity

📊 Why investors buy bonds:

• predictable income

• lower volatility than stocks

• portfolio diversification

• capital preservation

⚠️ Risks:

• interest rate changes

• inflation risk

• issuer default risk

📉 Bonds vs stocks:

Bonds → lower risk, lower returns

Stocks → higher risk, higher potential returns

✨ Key Takeaway:

Bonds help investors earn relatively stable returns while taking less risk than stocks.