Investment bonds are a type of financial instrument issued by corporations, governments, or other organizations to raise funds from investors. These bonds are essentially loans made by investors to the issuer, and in return, the issuer pays a fixed rate of interest on the principal amount borrowed.

Investment bonds are typically issued for a fixed term, ranging from a few years to several decades. At the end of the term, the issuer repays the principal amount to the investor. During the term, the investor may sell the bond to other investors in the secondary market.

The interest rate paid on investment bonds is determined by various factors, such as the creditworthiness of the issuer, prevailing market interest rates, and the term of the bond. Bonds issued by organizations with higher credit ratings typically offer lower interest rates than bonds issued by organizations with lower credit ratings.

Investment bonds are considered relatively low-risk investments compared to stocks because the interest rate is fixed and the principal amount is guaranteed to be repaid at maturity. However, the value of the bond may fluctuate in response to changes in prevailing market interest rates, which can affect the bond’s price in the secondary market.