There are two ways in which you can make money from a bond investment. The most passive way is to buy bonds and collect your interest payment every six or 12 months until they mature.
As most bonds come with a fixed coupon rate, you’ll always know how much you’ll be receiving. The second option — which is best reserved for experienced traders – is to buy bonds and then sell them on the secondary market before they mature.
The idea here is to sell the bonds for more than you paid by offering them at a premium. This is achieved when the value of the bonds increases in the open market, largely because the risks of default have since increased.