How to Start Investing in Government Bonds

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Corporate bonds and government bonds are two different types of bonds. Government bonds, also known as Treasury bonds, are issued by the government to fund their operations. They are considered to have a lower credit risk compared to corporate bonds and therefore offer lower yields. However, they are generally considered a safe investment option.

There are several types of government bonds issued by different levels of government, including:

• Treasury bonds: issued by the federal government and considered to be a low-risk, low-yield investment.
  
• Municipal bonds: issued by state and local governments to finance public projects and services, such as infrastructure and schools. They are generally tax-free for residents of the issuing jurisdiction.
  
• Agency bonds: issued by government-sponsored entities. They offer a higher yield than Treasury bonds and are backed by the full faith and credit of the government.
  
• Treasury Inflation-Protected Securities (TIPS): these bonds offer protection against inflation as the principal is adjusted according to changes in the Consumer Price Index.
  
• Savings bonds: a type of Treasury bond offered to individual investors at a low cost, with a low yield but guaranteed return of principal.
  

In summary, government bonds vary in terms of their credit risk, yield, and purpose of issuance, but they are generally considered safe investments. Corporate bonds have a higher yield compared to government bonds but also have a higher credit risk, meaning there is a greater chance that the issuer may default on their interest payments.