A bond is another way of investing your money and getting fixed income in return. By buying bonds you are basically lending your money to companies or governments that issued them in exchange for a return on the amount you invested. These are considered low risk investment too since they are backed by the company and the government that issued them. Again the risk is that the issuing entity ends up being unable to pay your back so make sure you are only dealing with established and solid companies and governments that issues them.

Basically a bond, CD or GIC is a contract that you go with an institution for them to keep your money for a period of time so they can use it and return it to you with some small profit. The difference between bonds and CD/GIC is that you can trade bonds any time so your money is not really locked. That is in essence transferring your contract with the bond issuer to another person. In CD or GIC your money is really locked and you can’t sell the contract to someone else.

Again, these are low risk investments and therefore give low return and should be for people who are retired or nearing their retirement or people who don’t have enough knowledge in investing. If you are still young and have the proper knowledge of investing then you are not going to put all your extra money in these types of investments, maybe a portion but not all.