High-yield bonds, often referred to as junk bonds, are fixed-income securities that offer higher interest rates compared to investment-grade bonds. They are issued by companies or entities with lower credit ratings, which means they carry a higher risk of default. Investors are attracted to these bonds for the potential of greater returns, but they must also be aware of the increased risk involved. These bonds are typically rated below BBB- by credit rating agencies like Moody's or Standard & Poor's. High-yield bonds can be an important part of a diversified investment portfolio, providing opportunities for income and capital appreciation, but they require careful consideration and risk assessment.