In
US Fixed Income markets, a bond is an instrument with a maturity of between 10 and 30 years.
Bonds, unlike
discount instruments such as
bills, pay
interest at regular intervals. This is in addition to a pay of
principal received at the
maturity of the bond.
For example, one might purchase a
US Government issued 30 year bond, paying a 6%
coupon maturing in Jan 2030 for perhaps $900. Every six months the owner would then receive a
coupon payment of $30, followed by a final payment of $1,000 (the so-called
face value of the bond) at maturity.
See also
bill and
note.