Bond
A loan you make to a government or company. It pays you interest and returns your money on a set date, called the maturity date.
A bond has a face value, an interest rate and a maturity date. US Treasury bonds are backed by the federal government. Corporate bonds pay more but carry more risk that the company will not repay.
Bond prices move opposite to interest rates. When rates rise, existing bonds lose value if you sell before maturity. Bonds usually swing less than stocks, which is why many portfolios hold some.
Example
A $1,000 bond paying 4% a year pays $1,000 × 4% = $40 in interest each year until it matures, then returns the $1,000.