Im not familiar with what bonds are.
I did a google search to try and understand there meaning a little better but i could not get a decent answer or understand the result pages it gave me.
Can anyone give me a short explanation of what bonds actually are.
How do bonds work?

Thankyou in advance

There are many kinds of bonds. But generally, a bond is when you loan government or a company money for a certain amount of time - say 5 years for example. You would get interest payments on the loan and the principal paid back to you at the end of the term plus periodic interest over the 5 years.

There is such a thing as junk bonds but in general terms, "high rated" bonds are a much safer investment than the stock market since the principal is guaranteed to be repaid whereas you can lose the whole 5 grand in the stock market. A little clearer?

A variable rate loan is a good way to look at it. There's more info on the subject here you might find helpful
Are bonds a good investment?

Here's another great site that explains bonds: It's called Bonds 101.
http://finance.yahoo.com/bonds/bonds_101

Here's another link which might also be of help:

http://www.fool.com/bonds/bonds01.htm

Another way to think of the bonds are Savings Bonds which I think most people are familiar with. That is money that goes to the government and you receive a bond in exchange. The bond is moreless, a governments IOU.

That's a good way to explain it, parrotbay, short and concise.

This is another site providing useful information, specially for people who is located in the UK:
Corporate bonds and government bonds : Directgov - Money tax and benefits

Thanks very much MasterMind.
I've heard alot about Bonds but never really understood them.
Im going to give the above link a good look through and then hopefully I'll be clued up on the subject.