Bonds When you buy a bond, you’re making a loan to a government, a company, or some other entity. The financial services industry loves to make this stuff seem complex, but it’s pretty simple. Bonds are loans. When you lend money to the federal government, it’s called a Treasury bond. When you lend money to a city, state, or county, it’s a municipal bond. When you lend money to a company such as Microsoft, it’s a corporate bond. And when you lend money to a less dependable company, it’s called a high-yield bond or a junk bond. Voilà! You’ve now completed Bonds 101.
