A bond is a loan to a government, company or other issuer, usually paying interest and returning its principal at a stated maturity. When market interest rates rise, existing bonds with lower fixed rates can become less attractive, so their market value may fall; prices can rise when rates fall. Longer-term bonds and funds with longer duration are generally more sensitive to these changes, while inflation, credit risk and the issuer’s ability to repay also matter. Holding an individual bond to maturity may reduce the importance of day-to-day price movements, but it does not remove other risks, so consider your circumstances and check details with a regulated adviser.