Fixed Income

A Fixed income is any investment that yields a regular(fixed) return.

i.e. Paying interest on borrowed money is a fixed-income security.
But when a company borrows money, it is called a bond or corporate bank dept. bonds have high risk.
Notes/bills have lower risk because they are money borrowed by the government.

The term 'Fixed income' may also be used to refer to a person's income that does not change.
i.e. Pension payments, dividends from preferred stock investments.


The principal of a bond is the amount that is being lent.
The coupon is the interest that will be paid.
The maturity is the end of the bond, the date that the amount must be returned.
The issuer is the entity (company or govt.) who is borrowing the money (issuing the bond) and paying the interest (the coupon).
The issue is another term for the bond itself.
The indenture is the contract that states all of the terms of the bond.