Legal Definitions - fixed-income security

A fixed-income security is a type of investment that provides a fixed amount of income to the investor. It is a type of security that represents a loan made by an investor to a borrower, such as a company or government. The borrower agrees to pay back the loan with interest over a set period of time.

Examples of fixed-income securities include:

• Bonds
• Treasury bills
• Certificates of deposit
• Corporate bonds

For example, if you buy a bond from a company, you are essentially loaning money to that company. The company agrees to pay you back the amount you loaned, plus interest, over a set period of time. This interest rate is fixed, meaning it does not change over the life of the bond.

Fixed-income securities are considered less risky than other types of investments, such as stocks, because they provide a fixed rate of return. However, they may also provide a lower rate of return than other investments.