Bond

What is a bond?

A bond can be issued by a company or by a state. The issuer of such a security, which is also called an annuity, will take on the role of the debtor in order to borrow capital. The buyer of such a fixed-interest security will assume the role of the creditor, thus receiving a guarantee of repayment of the money lent, including interest. In contrast to shares, the buyer of a corporate bond will not become a (co-)owner of the company. They only receive a securitised repayment claim including interest as payment for the capital provided. The debtor thus remunerates the creditor with interest.

What are federal bonds?

Federal bonds are debt securities issued as government bonds by the Federal Republic of Germany. Fixed-interest securities have a term of 10 to 30 years and are investor-friendly, low-risk investments. As listed securities, they are available to everyone and can be traded freely through various banks. Interest is paid annually.