A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- Treasury BondA long-term loan to the U.S. government that pays fixed interest and is considered very low risk.
- Corporate BondA loan you make to a company that pays interest and generally offers higher yields but more risk than government bonds.
- YieldThe income an investment pays you each year, shown as a percentage of its current price.
- Coupon RateThe fixed annual interest a bond pays, shown as a percentage of its face value.
- Municipal BondA loan to a state or local government whose interest is often free from federal income tax.
- Bond LadderA set of bonds with staggered maturity dates so a portion comes due at regular intervals for steady access to cash.
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Plain-English education — not personalized legal, tax, or investment advice.