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
- BondA loan you make to a government or company that pays you interest and returns your money on a set date.
- Reinvestment RiskThe chance that when a bond or CD matures, you can only reinvest the proceeds at a lower interest rate.
- Bond LadderA set of bonds with staggered maturity dates so a portion comes due at regular intervals for steady access to cash.
- YieldThe income an investment pays you each year, shown as a percentage of its current price.
- Treasury BondA long-term loan to the U.S. government that pays fixed interest and is considered very low risk.
- DurationA measure of how sensitive a bond's price is to changes in interest rates, shown in years.
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Plain-English education — not personalized legal, tax, or investment advice.