The different types of bonds
Government bonds
Governments borrow money to raise funds for various, ongoing budget requirements such as infrastructure and defence spending, as well as public pensions. These bonds are widely seen as a relatively low-risk investment, as governments are generally more financially stable than a private company.
Corporate bonds
Companies issue these for numerous funding needs. For example, a firm may need to finance its entry into a new market or to help it to build new premises. While corporate bonds tend to be a less secure investment than government bonds, the risks vary depending on the type of company the investor lends to.
