government bond

A government bond is a debt security issued by a government to support government spending and obligations. These bonds may be issued by the federal government (e.g. treasury notes) or states and local governments (municipal bonds). Government bonds can pay periodic interest payments called coupon payments. Government bonds issued by national governments are often considered low-risk investments since the issuing government backs them. Examples of government bonds are savings bonds, treasury notes, treasury bonds or Treasury Inflation-Protected Securities (TIPS).