Buying Bonds For Beginners -

Bonds act as the "ballast" on a ship. When the stock market gets rocky, bonds tend to stay much steadier. They provide a predictable and preserve your capital for when you need it later.

If you hold a bond paying 3% and new bonds start coming out at 5%, your 3% bond is less "valuable" to others, so its market price drops.

When you buy a bond, you are the lender. The entity you’re lending to (the ) promises to do two things: buying bonds for beginners

This is the most important rule for beginners:

They pay you a fixed set of payments, known as the coupon , usually twice a year. Bonds act as the "ballast" on a ship

Issued by states or cities to fund public projects like schools or highways. A major perk is that the interest is often tax-free at the federal level.

On a specific date (the maturity ), they give you back the full original amount you lent them (the face value ). 2. Common Types of Bonds If you hold a bond paying 3% and

You can buy U.S. Treasuries (including the popular inflation-protected I Bonds ) at TreasuryDirect.gov.