Debenture

A debenture is a type of debt instrument that companies or governments issue to raise money. When someone buys a debenture, they are essentially lending money to the issuer in exchange for regular interest payments and the return of the principal amount at a later date. Debentures are usually unsecured, meaning they aren't backed by specific assets, but they are considered safe investments as they rank higher in claims compared to stocks if the issuer faces financial difficulties. Investors choose debentures for steady income through interest and to diversify their portfolios.