Bonds
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How do you make money with bonds?
When a bond is issued, the company or government issuing the bond commits to pay a specified amount of
interest at regular intervals over a certain time period. So you get a regular income stream during the time
that you own the bond. In addition, if interest rates in the bond markets fall, the value of your bond may
increase and you may be able to sell the bond for more than you paid for it even before its maturity date.
That’s because if your bond is paying a higher rate than investors can get from other bonds, they will be
willing to pay a premium in exchange for the higher locked-in interest rate.