There are many different types of bonds available, but basically all bonds are similar to a loan with interest. The bond holder, the lender, provides immediate money to the bond issuer, with payment returned at a fixed rate over specific intervals of time. In this way the borrower is able to have immediate money to expand or improve, while the lender is assured that they will have a specific amount of interest paid for their investment. Unlike an investor, bond holders do not buy interest in the company, government or business; rather they are simply providing capitol for a return. Fixed rate bonds provide a fixed rate of return over the duration of the loan or the bond and are the most secure. Floating rate notes or bonds are based on a specific index or reference. These are slightly more risky as the reference index may increase or decrease over time. Another less common type of bond is called a zero interest coupon bond. These bonds don't pay a particular interest but rather a higher return at the end of the duration of the bond. Another common type of bond is an inflation linked bond that is referenced to inflation. These are somewhat similar to a floating note bond other than the inflation also affects the principle amount of the investment as well as the interest paid out. Bearer bonds are those bonds that are made out to the bearer, or whoever holds the bonds at time of deposit.