A Bond is a security that companies and governments (issuers) lend to the public. The purchasers called bondholders. Bondholders will purchase these bonds and receive fixed interest payments. The bond has a set lifespan shown as the maturity date. The lifespan can be anywhere from 6 months to 60 years. Once it has reached  it’s maturity date, the bond is redeemed and any interest leftover will be paid out. During it’s lifespan, the bondholders will receive money from the issuer on agreed intervals. ie: quarterly, semi-monthly, etc.

The issuer will use the money received to finance themselves. From the issuers point of view, you (bondholder) are lending money to them. The interest paid out to the bondholder depends on the company.

Types of Bonds

  • Federal Government
  • Provincial Government
  • Municipal Government
  • Corporate
  • Real Return Bonds
  • Junk Bonds
  • Canada Savings Bond
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