A bond that is associated with no risk (credit risk, default risk) over its term or time to maturity. In other words, this bond exposes its holders to no risk and will pay off its contractual interest and redemption amount (principal) at its maturity date, irrespective of the state of the broader economy. Typically, riskless bonds and similar debt instruments are issued by creditworthy governments and government agencies, that stand ready at all times to honor their debt obligations. An example is Treasury bonds (T-bonds).
The interest rates attached to such secured instruments are usually known as riskless rates.
