Short-Term Bonds

A short-term bond is a bond that matures, or repays an investor’s principal, in under five years.

Ultra-short bonds are a subset that mature in less than a year. Intermediate-term bonds have maturities of up to 10 years and long-term bonds mature in 10 to 30 years.

Short-term bonds are less sensitive to interest-rate changes than longer-term bonds. In other words, they have less interest-rate risk—but they can still have significant credit risk. Short-term bonds will generally lose less than comparable longer-term bonds when interest rates rise but will gain less when rates fall.