Bonds are debt instruments issued by governments and corporations to raise funds. They have features like a face value, maturity date, coupon interest rate, and credit quality. The main types of bonds are government bonds, corporate bonds, and municipal bonds. Bonds can also be categorized by interest rate structure, which includes fixed rate bonds, floating rate bonds, zero coupon bonds, inflation linked bonds, and perpetual bonds. When investing in bonds, the main advantages are fixed returns, lower risk than stocks, and clear ratings. However, disadvantages include needing a larger initial investment, risk of bankruptcy of the issuer, and lower liquidity than stocks.