A bond is a financial security that represents a loan made by an investor to an issuing entity.
A bond is a financial security that represents a loan made by an investor to an issuing entity. When you buy a bond, you are lending money with the expectation of getting paid back your initial loan at a specified future date with interest. An exception is a zero-coupon bond, which entails a discounted purchase price and a lump-sum payment at maturity that includes accumulated interest and principal.