The main function of a bond is to:

The main function of a bond revolves around its role as a financial instrument that allows borrowers, such as corporations or governments, to raise funds securely. When an entity issues a bond, it is essentially taking out a loan from the bondholders who purchase the bond. In return for lending their money, bondholders receive periodic interest payments, known as coupon payments, and the promise that the principal amount will be repaid at maturity.

Bonds provide a structured and regulated way for borrowers to acquire needed capital without the immediate financial burden that might come from other forms of funding. This is particularly advantageous for large projects or initiatives that require substantial funds upfront. The promise of interest and repayment adds a layer of security for investors, making bonds a popular choice for those looking to earn a steady return on their investment with lower risk compared to stocks.

This emphasis on fundraising is what distinguishes bonds in the financial landscape, as they are explicitly designed for the purpose of borrowing rather than generating immediate profits for the issuer, investing in commodities, or functioning as currency.