Investing money in small amounts is much safe, and this investment give not perfect value but a good value. There are four common types of bonds investments available and basically provided by indian government, through state and local governments,corporations and foreign governments.
The biggest thing related to bonds is that whatever you invest will always returns back to you. This creates bonds the good investment cycle for those who have just begin investing and have less risk tolerence.
The US Government ensures Treasury Bonds from the Treasury Department. Everyone can purchase these treasury bonds with selected time limit starting from 3 months to 30 years.
Treasury bonds basically includes Treasury Notes (T-Notes), Treasury Bonds and Treasury Bills (T-Bills). All Treasury bonds are supported by the United States Government, and tax is only applied on the interest that the bonds investments actually earns
Corporate bonds are provided by public securities markets. A corporate bond is generally company giving its debt. These types of bonds runs on high interest rates, and little risky.
Other bonds selled by State and local Governments rather than issued by the federal government, these types of bonds have highest interest rate and more than corporate bonds also. Because local and state goverments issues with bankrupt and many other problems.
Bonds selled by Local and State Goverment are free from the income taxes – even rates are high in interests. Common bonds of local and state goverment is Tax Free Municipal Corporation bonds.