There are two primary ways for bond investors to make money: collecting interest income and generating capital gains. It’s important to understand these concepts—as well as the other basics of investing in bonds—if you’re interested in pursuing fixed income securities. When you buy a bond, you’re loaning money to the issuer. Sometimes, the bond issuer is a corporation corporate bondsand other times it’s a government or municipality sovereign or municipal bonds. The interest rate, or the coupon rate, is determined by the general level of interest rates at the time, the maturity of the bond, and the credit rating of the issuer. This could be a great deal for you because you get money to live on and pay your bills, and a great deal for the company, because they can use the bobds to build new facilities, expand their product lines, or meet other needs. To understand the relationship between making money in bonds and interest rates, read about a concept known as bond ...