The U.S. government releases its own bonds from the treasury and from several federal government companies. Those developing in less than one year are called T-bills. Bonds that mature in one to 10 years are T-notes, and those that take more than ten years to develop are treasury bonds. Sometimes, you don't have to pay state or regional income taxes on the interest they make.

Munis finance things like hospitals, schools, power plants, streets, office complex, airports, bridges and so forth. Municipalities usually release bonds when they require more money than they gather through taxes. The good idea about local bonds is that you do not have to pay federal income taxes on the interest they earn.

While business bonds are a higher danger than federal government bonds, they can make a lot more cash. There's also a much larger selection of corporate bonds. The downside is that you do have to pay federal earnings tax on the interest

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