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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Investment Grade

Definition:

Ratings agencies like Moody's think teachers shouldn't have all the fun—so they grade bonds. The higher the grade, the better the bond is doing and the more likely you are to make money.

According to the S&P system, bonds with grades of BBB or higher are investment grade, which means your investments might make you money. Anything below that means the bonds haven't done their homework and are maybe playing hooky.