ELI5: bonds
// explanation
What is a bond?
A bond is like an IOU that a borrower gives to a lender [2]. When you buy a bond, you're lending money to a company or government, and they promise to pay you back after a certain amount of time, plus some extra money called interest [2][4].
Why do people use bonds?
Borrowers issue bonds to raise money from investors who are willing to lend them money for a long time [2]. This helps governments and companies get the funds they need to pay for big projects or investments [4].
What are savings bonds?
Savings bonds like Series I bonds are special bonds sold by the U.S. government [3]. The interest you earn on these bonds changes every 6 months depending on inflation, so sometimes you earn more money and sometimes less [3].
How do you get bonds?
You can buy bonds through services like TreasuryDirect, though there are limits—for example, you can only buy $10,000 worth of Series I bonds per year [1][3].
// sources
The annual purchase limit for Series I savings bonds in TreasuryDirect is $10,000. Check out our new savings bond explainer page. Latest News. 2026. April 2026.
A bond is a debt security, like an IOU. Borrowers issue bonds to raise money from investors willing to lend them money for a certain amount of time.
The interest rate on a Series I savings bond changes every 6 months, based on inflation. The rate can go up. The rate can go down.
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