They are backed by the full faith and credit of the U.S. government. The treasury bills are short-term debt obligations and they mature in one month to a year. In contrast, treasury notes and bonds are long-term debt obligations, up to 30 years. These bonds are issued by local authorities to finance capital projects, such as schools, city buildings and infrastructure improvements, and other undertakings. The interest paid on municipal bonds is free from federal income tax.
Some bonds are also exempt from state and local income taxes within the state where they are issued.
Brokered CDs A Certificate of Deposit is a transferable receipt issued by a commercial bank in return for a customer's deposit of funds. The bank agrees to pay back the principal deposit plus interest on a specified future date. The time frame ranges from months to years. When you buy one of these bonds, you receive a share in a package or pool of home mortgages. As homeowners make their mortgage payments, your share is passed along to you in monthly checks.