Bond Buying Guide -

To evaluate a bond investment effectively, you must understand its primary features:

: Issued by states or cities to fund public projects. Their primary advantage is that interest is often exempt from federal—and sometimes state—income taxes. bond buying guide

: The actual return on your investment, which fluctuates based on the price you paid for the bond relative to its coupon rate. Common Types of Bonds To evaluate a bond investment effectively, you must

: Backed by the "full faith and credit" of the U.S. government, these are considered virtually risk-free. They include short-term Bills , intermediate-term Notes , and long-term Bonds . To evaluate a bond investment effectively

: The fixed annual interest rate the issuer pays the bondholder.

: The specific future date when the issuer must return the bond's face value to the investor.