What is the difference between a debenture and Bond?



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They seem very similar

3 Answer(s)


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Debenture: A type of debt instrument that is not secured by physical asset or collateral.

Bond: A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate

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ebenture: A type of debt instrument that is not secured by physical asset or collateral.

Bond: A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate

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Debentures and bonds are types of debt instruments that can be issued by a company.The functional differences center around the use of collateral, and they are generally purchased under different circumstances.
Debentures have a more specific purpose than bonds. Both can be used to raise capital, but debentures are typically issued to raise short-term capital for upcoming expenses or to pay for expansions.

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