How are bonds different from shares?



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To what extent are bonds different from shares, considering the fact that they also have a considerable risk involved?

2 Answer(s)


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bonds are issued mostly by govt to raise money for the purpose mentioned in the bond prospectus eg: infra bond is issued to raise money from the public for infrastructure development.
The rate of return of bonds varies with the interest rate of the banks and also bonds have lock-in period from 5 to 25 years.
So it is considered to be a long term investment instrument and also the liquidity is less but it is safe and secure investment.

Shares are issued by the companies to raise money from the public and shares can be bought and purchased from the share market at any time and the rate of return is not fixed but shares are considered to be more liquid as compared to shares.

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Shares are more risky whereas bonds have minimal risk