Fixed income refers to any type of investment that yields a regular (or fixed) return.
A fixed income investment provides a return in the form of fixed periodic payments as well as the eventual return of the principal investment upon maturity. It is unlike a variable-income security, where payments change based on an underlying measure such as short-term interest rates. The payments of a fixed-income security are known in advance.
If someone decided to borrow £1,000 from a bank for 12 months, with an agreed repayment figure of £100 due each month, the bank would have made a fixed income investment. The repayment figure is not able to change, the bank receive the same amount of money each month and at the end of the loan repayment period the bank will have collected £1,200 - making £200 from their original £1,000 investment.
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