Corporate bonds are like lending money or providing a loan to a business. The lender loans money to a company or corporation, in return the corporation pays you interest on the money that you have lent them. The company that has borrowed the money commits to you or gives you their promise that they will pay back the money borrowed on a pre-arranged date. This is called the maturity date.
Corporate bonds usually come in multiples, like $1, 000 or $5,000. Interest on the money is paid to the lender. This amount is usually pre-determined and paid semiannually. The interest received from the corporate bonds is taxable and must be declared.
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