A bond is a type of debt security that is issued by a government, corporation or other organization to raise capital. When an individual or organization buys a bond, they are lending money to the issuer in exchange for interest payments and the return of the principal at a future date.

Bonds are typically issued in denominations of $1,000 or more and have a fixed term, usually several years. The interest rate on a bond is called the coupon rate, and it is paid to the bondholder on a regular basis, typically semi-annually. At the end of the bond's term, the issuer pays back the principal, also known as the face value or par value, to the bondholder. Bonds are considered to be a relatively low-risk investment, as they are backed by the issuer's ability to make the required interest and principal payments. However, the value of a bond can fluctuate based on market conditions and the creditworthiness of the issuer.