They are issued to help finance all of the costs involved in operating the government. Municipal Bonds State and local governments to help pay for schools, streets, highways, hospitals, bridges, airports, and other public works issue municipal bonds. You usually don t have to pay federal taxes on the interest earned from municipal bonds. Corporate Bonds Corporate bonds are issued by businesses to help pay for business expenses. There are a ton of different corporate bonds available all with their own interest rates, maturities, and credit ratings.
Corporate bonds are generally higher risk bonds in comparison to municipal and government bonds.
They also have a higher rate of return than municipal and government bonds. However you do have to pay taxes on the interest earned from corporate bonds. Municipal bonds are issued by more than 50,000 state and local governments and their agencies to fund projects such as schools, streets, highways, hospitals, bridges, and airports. This article will guide you through the basics. Inc. PageWise makes no representations about the content published on this site.