The U.S. federal government issues its own bonds from the treasury and from numerous government companies. Those growing in less than one year are understood as T-bills. Bonds that develop in one to 10 years are T-notes, and those that take more than 10 years to mature are treasury bonds. Sometimes, you do not have to pay state or local income taxes on the interest they earn.

Munis finance things like healthcare facilities, schools, power plants, streets, office complex, airports, bridges and so forth. Municipalities normally issue bonds when they need more money than they collect through taxes. The advantage about municipal bonds is that you do not have to pay federal earnings taxes on the interest they make.

elizabeth gray wesley bryan