BONDS

Bonds are a way for corporates and Governments to borrow money . So we can say Bonds to be a contract between the borrower and the lender .

Types of Bonds that can be issued

Zero Coupon Bonds or Deep Discount Bonds: These Bonds are issues at a discount to their face value , and the investor would not receive any period interest during the duration of the Bond , but would receive the face value at the time of maturity
Eg: You may buy a Deep Discount Bond with face value of  Rs.5000 at a price of say Rs.3000 and will get Rs.5000 at maturity.

Fixed Interest Bonds: These are Bonds with fixed Interest rate throughout the duration of the Bonds and may pay interest periodically or at maturity as per the Bond document

Floating Interest Rate Bonds: These are Bonds , with a floating interest rate . Floating interest would be always be liked to MIBOR + x and this interest may be paid periodically or at maturity as per the Bond document .

Terms used with Bonds are "Coupon" for Interest rate and duration is called "Maturity" .
MIBOR:Mumbai Inter-bank Offer Rate