Bonds are debt instruments issued by entities such as governments or corporations to raise capital. When you purchase a bond, you are essentially lending money to the issuer in exchange for periodic interest payments and the return of the bond's face value at maturity. This makes bonds a popular choice for investors seeking stable income and lower risk compared to stocks. There are various types of bonds, including Treasury Bonds, Municipal Bonds, and Corporate Bonds, each with its own risk and return profile. Investors often use bonds to diversify their portfolios and manage risk, as they tend to be less volatile than equities and can provide a steady income stream.