What Are Commercial Bonds And Why Should You Invest In Them
Commercial bonds are fixed-income products issued by states and companies. If you are considering investing your money in bonds, you must first know what they are, how they work, and what risks they have. On this page, we resolve the main doubts about this investment instrument and clarify the difference between bonds, bills, and obligations What are the bonds? Bonds are fixed-income instruments issued by a Government or by an offshore bank to finance itself. These products are, in short, a debt. Its operation is simple: the issuer of the bond undertakes to return the money slowly to the bondholder on a previously agreed date together with some interest, which can be paid regularly utilizing a coupon or discounting the initial capital. Bond issues allow public and private institutions to obtain large sums of money that would be difficult to collect if they applied for a loan from a single lender. With this system, they can divide the loan amount they need into many parts (th...