When you buy a Bond, you are basically "lending" that money to a company (or a government) in return for a series of interest payments (usually for a fixed & finite period of time.)
Bond is the document by which corporate sector obtain loan from the public where as share is the document by which the corporate sector raise capital from the public.By purchasing bonds one become creditor and entitled for interest at fixed rate for the amount involved where as by purchasing shares one become owner(share holder) and entitled for share in the profit(called as dividend) at the rate declared in the year end after finalising the accounts for the amount invested.Here one has to bear the loss also if the company goes on loss.
In simple terms, when you buy a Bond you become the creditor of the organization which has issued the Bond whereas when you buy a share you are one of the owners of the Company.
Stocks offer an ownership stake in the company.
-While bonds are loans offered at a fixed interest rate by the investors to the company.
Stocks offer is a greater risk because it toally depends upon the value of the company and therefore, stock price may fluctuates depending upon how the market values the company.
-While with bonds, an investor is promised a fixed return.
