Skip to main content
Glossary · investing

What is Corporate bond?

A bond issued by a company to raise capital.

Last updated

Corporate bonds pay higher yields than government bonds to compensate for higher default risk. Investment-grade bonds (rated BBB– and above) are considered relatively safe; high-yield ('junk') bonds pay much more but can default.

Diversified corporate bond funds and ETFs reduce single-issuer risk and are the most common way retail investors access this asset class.

Practice this in Aurora

See a plain-English bull/bear/bias breakdown on any stock — no signup needed.

Open Decision Lab →

Frequently asked questions

Are corporate bonds safer than stocks?

Investment-grade bonds typically are, especially over shorter horizons. High-yield bonds behave more like stocks in stressed markets.

Related terms