While not as common as buying equities, investing in bonds is still fairly popular as bonds are great vehicles to generate income while keeping capital protected.
A bond represents a loan obligation wherein a borrower agrees to pay the lender at a specified rate known as the coupon rate in a specified time period or maturity.
Bonds can be defined into the following five buckets: Sovereign Debt, Supranational Sub-Sovereign Agency (SSA Debt), Real Return Bonds (RRBs), Corporate Credit and Asset-Backed Securities.
Canada Savings Bonds supported the Canadian government in raising funding for capital projects, while enabling Canadians to channel their savings into a virtually risk-free asset. The initiative has been discontinued as of December 2021.