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A bond is debt instrument that a government or a company issues to raise money. Basically, it is a contract between a government or a company—who is acting as the borrower—and investors like you—who are acting as the lender. You receive the interest on a monthly/quarterly/half-yearly/yearly basis, depending on your preference. When you buy a bond, you are lending money to the government or company that issued the bond, and in return, the government or company that issued the bond is agreeing to pay your money back, with interest, at some point in the future.