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Reviewed by Jul 30, 2021| Updated on
Bond is a financial instrument issued for a loan offered by an investor to a borrower being the Government or Corporate entity. It bears a fixed repayment that is paid on the maturity or expiry of the due date to the investor.
When companies need money to fund new projects or maintain ongoing business or refinance existing debts, they can issue bonds to investors. The borrower (issuer) will define the terms of the bond, interest or coupon payment intervals and maturity date by when the principal must be paid back to the investor (lender).