A risk associated with investments. By investing in bonds, the investor runs the risk that he or she will purchase at a certain interest rate and the economy will improve after the purchase, making current interest rates higher than it was at the time of purchase. The investor is then locked into a lower interest rate.
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A risk faced by investors who invest in bonds characterized by an individual being locked into a lower interest rate when interest rates are generally increasing in the economy.
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UK: Risk that changes in interest rates will affect the resale value of debt securities held in a fund portfolio, e.g. a pension fund. There is an inverse relationship between the rate of interest and the value of the underlying security such as a bond.