The U.S. federal government provides its own bonds from the treasury and from a number of federal government agencies. Those growing in less than one year are referred to as T-bills. Bonds that develop in one to 10 years are T-notes, and those that take more than ten years to mature are treasury bonds. In many cases, you don't need to pay state or local income taxes on the interest they make.

Munis financing things like medical facilities, schools, power plants, streets, office complex, airports, bridges and the like. Municipalities generally issue bonds when they need more cash than they gather through taxes. The great thing about local bonds is that you don't have to pay federal income taxes on the interest they earn.

While business bonds are a greater danger than government bonds, they can earn a lot more cash. There's likewise a much larger selection of business bonds. The downside is that you do have to pay federal earnings

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