Bonds Bonds, or fixed income investments, are essentially loans from an investor to a company or government. For example, when a municipality (such as a city, county, town, or village) needs to build new roads or a hospital, it issues bonds to finance the project. From Investing in Bonds For Dummies By Russell Wild You may think of bonds as thoroughly modern financial instruments, but they have a long history. From Bond Investing For Dummies, 2nd Edition By Russell Wild If you want to invest in bonds, you need to know how to read the bond ratings that the big three rating companies use and how to figure whether a taxable or tax-free municipal bond is the better investment. Bonds are long-term lending agreements between a borrower and a lender. Tax Status. Intermediate Accounting For Dummies. Surety Bonds for Dummies In essence, a surety bond is a contract between three parties which is legally binding and is entered into by the three parties for the purpose of protecting one of the parties against poor performance or non-compliance by the other party.


While the majority of corporate bonds are taxable investments, there are some government and municipal bonds that are tax-exempt, meaning that income and capital gains realized on the bonds are not subject to the usual state and federal taxation. Bond Investing For Dummies Cheat Sheet If you want to invest in bonds, you need to know how to read the bond ratings that the big three rating companies use and how to figure whether a taxable or tax-free municipal bond is the better investment. They played an important part in helping the Allies win World War II, for example.