A bond typically issued by a company or government, uses investor’s money to raise money to fund day-to-day operations or other projects and the investor is paid back the initial investment (the face value of the bond) on the maturity date plus periodic interest payments. Bonds are considered a low-risk option when diversifying your portfolio.
The U.S. Treasury issues bonds that can be purchased by individuals either from a broker or though the Treasury Direct website. Bonds are issued in increments of $100 and are typically offered several times a year.