Bonds are often described as safer than shares, but every bond carries risks. Losses are possible, including loss of the whole amount invested.
| Risk | What it means |
|---|---|
| Credit / default risk | The issuer may fail to pay interest or principal. |
| Interest-rate risk | Bond prices fall when market yields rise; long bonds are most affected. |
| Currency risk | If the bond's currency weakens against yours, your return falls. |
| Liquidity risk | You may not be able to sell quickly or at a fair price. |
| Reinvestment risk | Coupons or early redemptions may have to be reinvested at lower rates. |
| Call risk | The issuer may repay early when it suits them, not you. |
| Country and political risk | Sanctions, capital controls or political events can stop or delay payments. |
| Legal and structural risk | Subordination, weak covenants or untested enforcement can reduce recoveries. |
| Inflation risk | Fixed coupons lose purchasing power when inflation is high. |
| Custody and counterparty risk | Problems at a broker or custodian in the holding chain. |
Any offer of a fixed daily or hourly "profit", guaranteed returns or very high returns with no risk is not how bond investing works. Read our page on how to spot investment scams.