A bond is like a promise. Imagine you want to buy a big toy, but you don’t have enough money. So, you ask your friend to lend you some money. You promise to give it back after some time and even give a little extra as a thank you. That’s what a bond is! It’s a promise to pay back money with a little extra called interest.
Think of a bond like a superhero cape. When someone wears it, they have the power to help others. When a company or a government needs money, they wear the bond cape and ask people to lend them money. In return, they promise to pay back the money with interest, like a superhero returning the favor.
Imagine a piggy bank that grows. When you give your money to someone through a bond, it’s like putting it in a special piggy bank. Over time, the piggy bank grows bigger because of the interest. When you open it later, you’ll find more money than you put in, thanks to the bond.