When you buy a bond from a company, you are essentially loaning the money to the company to fund their projects. This money is loaned by you to the company for a specific period of time. After this period, the company returns your money along with an interest paid on it.

The total returns on the bonds may not always be fixed, as is the case with variable interest rate bonds. So be cautious about the amount of money you invest in bonds and check on the reputation of the company with whom you plan to invest.

Difference between a bond and a bond mutual fund
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