Investing in Bonds: A brief introduction

Bonds are debt securities issued by governments, corporations, or other entities. When you purchase a bond, you agree to lend money to the bond issuer. The bond issuer is obligated to pay you a specified interest rate (coupon) during the life of the bond and return the principal to you upon maturity. You may hold the bond until a pre-specified maturity date or sell it during the life of the bond.

Reasons of investing in bonds:

1. Enjoy higher yield than common bank deposits.

2. Enjoy capital gain when the bond price increases.