| Investing in bonds is very safe, and the returns are | | | | selling its debt. Corporate bonds usually have high |
| usually very good. There are four basic types of | | | | interest rates, but they are a bit risky. If the |
| bonds available and they are sold through the | | | | company goes belly-up, the bond is worthless. |
| Government, through corporations, state and local | | | | State and local Governments also sell bonds. Unlike |
| governments, and foreign governments. | | | | bonds issued by the federal government, these |
| The greatest thing about bonds is that you will get | | | | bonds usually have higher interest rates. This is |
| your initial investment back. This makes bonds the | | | | because State and Local Governments can indeed go |
| perfect investment vehicle for those who are new | | | | bankrupt – unlike the federal government. |
| to investing, or for those who have a low risk | | | | State and Local Government bonds are free from |
| tolerance. | | | | income taxes – even on the interest. State and |
| The United States Government sells Treasury Bonds | | | | local taxes may also be waived. Tax-free Municipal |
| through the Treasury Department. You can purchase | | | | Bonds are common State and Local Government |
| Treasury Bonds with maturity dates ranging from | | | | Bonds. |
| three months to thirty years. | | | | Purchasing foreign bonds is actually very difficult, and |
| Treasury bonds include Treasury Notes (T-Notes), | | | | is often done as part of a mutual fund. It is often |
| Treasury Bills (T-Bills), and Treasury Bonds. All | | | | very risky to invest in foreign countries. The safest |
| Treasury bonds are backed by the United States | | | | type of bond to buy is one that is issued by the US |
| Government, and tax is only charged on the interest | | | | Government. |
| that the bonds earn. | | | | The interest may be a bit lower, but again, there is |
| Corporate bonds are sold through public securities | | | | little or no risk involved. For best results, when a |
| markets. A corporate bond is essentially a company | | | | bond reaches maturity, reinvest it into another bond. |