Bonds are debt securities issued by governments, corporations or other entities. When you purchase a bond, you are agreeing to lending 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:

  • Enjoy higher yield than common bank deposits
  • Bonds provide investors with interest rates several times higher than on bank time deposits, allowing investors to earn higher returns with the same amount of principal
  • Same with other general securities and futures products, bond prices can rise or fall as interest rates change. When the bond price rises, investors can realize capital appreciation