A bond is a debt instrument through which you lend money to an entity, typically a corporation, municipality, state, or sovereign government, for a defined period. In return, the entity offers a fixed or variable interest rate and promises to repay the money (principal) at maturity. These entities use bonds as financing tools to raise capital for various projects and activities, such as infrastructure development or expanding business operations. Investing in bonds in India offers the advantage of earning consistent returns, making them a dependable choice for diversifying your portfolio and ensuring a steady income stream.