Bond
A loan you make to a government or company. It pays you interest and returns your money on a set date.
Practice it
Learn the bigger idea
- Interest rates and the Fed, explainedThe price of borrowing money, who sets it, and why a change in Washington shows up in your car loan and savings account.
- The stock market, explainedWhat a share of stock is, why prices jump or drop on the news, and what the S&P 500, Dow and Nasdaq actually measure.
- Investing, explainedHow money grows on its own over time, why starting at 16 beats starting at 36, and the simple tools most people use.
Related words
- Interest rate
- Interest shown as a percent of the amount borrowed or saved, usually per year.
- Federal Reserve
- The U.S. central bank, often called the Fed. It raises or lowers a key interest rate to keep prices stable and jobs plentiful.
- Yield
- The yearly return an investment pays, shown as a percent. For bonds, yields go up when prices go down.
- Treasury
- A loan you make to the U.S. government. Treasuries are considered one of the safest investments.
- APR
- Annual percentage rate: the yearly cost of borrowing money, shown as a percent. It includes interest and some fees. Many credit cards charge more than 20%.
- Inflation
- When prices rise across the economy, so each dollar buys a little less.
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