which type of bonds offer a higher yield
Investment grade corporate bonds are less risky than non-investment grade corporate bonds and, therefore, offer lower yields. Non-investment grade corporate bonds, also known as high yield bonds, are considered to have a higher risk of defaulting. Because of this higher risk, the issuer of these types of bonds will offer a higher yield and, usually, a higher coupon rate than similar bonds with a higher credit rating. Common bond terms Issuer: The corporation, government, or agency that issues the bond.