Basics of Bond Investing [Infographic]

What is a bond?

A bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest.

There are various types of bonds:

• Treasury Bond
• Zero Coupon Bond
• Convertible Bond

Various Bonds terminologies:

Face Value – The original issue price of the bond. It’s the price at which the bonds were initially issued.

Coupon – The rate of interest offered by the issuer. The more secured the bond is the less the coupon would be.

Maturity – The date at which the principal amount is repaid to the investors.

Check out this excellent Infographic on Bonds: This had appeared in ET.

(Enlarge image by clicking on it)