## What is a bond - the simplest explanation for investors
Forget about complicated definitions. A bond is simply a loan that you give to a company or government. In return, you receive regular payments in the form of interest and the return of your investment at a specified date. It’s nothing more complex than that – if you lend someone $1000 with an agreement that they will return $1050 to you in a year, you are essentially conducting a transaction similar to a bond.
## How does it work in practice?
When a government or corporation needs cash, it goes to the market and issues debt securities
View OriginalForget about complicated definitions. A bond is simply a loan that you give to a company or government. In return, you receive regular payments in the form of interest and the return of your investment at a specified date. It’s nothing more complex than that – if you lend someone $1000 with an agreement that they will return $1050 to you in a year, you are essentially conducting a transaction similar to a bond.
## How does it work in practice?
When a government or corporation needs cash, it goes to the market and issues debt securities