Savings and InvestmentsBonds |
What affects bond prices? |
Bond prices move in the opposite direction of interest rates. So when interest rates rise, bond prices fall, and vice versa. If you buy the bond at a discount and hold the bond for the full term, you will get all of your money back plus interest.
A bond is just like an IOU, except that it also pays interest. Bonds can be safer than stocks for investors, but they usually pay lower interest rates, as well.