Floating rate bonds are becoming a popular investment option, thanks to their adjustable interest rates. For beginners, understanding the basics of floating rate bonds can be a great way to diversify their investment portfolio. #1 Understanding floating rate bonds Floating rate bonds are debt instruments with interest rates that reset periodically, usually every six months or annually. #2 Benefits of floating rate bonds One of the biggest advantages of floating rate bonds is that they provide protection against rising interest rates. Advertisement#3 Risks associated with floating rate bonds While floating rate bonds have their advantages, they also come with risks.