Government Bonds Definition

A Government Bond is debt issued by a government.

It’s like other bonds, it follows the same behaviour, but the issuer is a Sovereign Government, which often can be considered safer than other entities.

Following a monetary policy, Governments usually issue bonds to gather money for their domestic projects and for money supply balancing.

If we consider all bonds belonging to a specific Nation or State (municipalities, companies and so on), probably the Government Bonds grant the lowest yield, for the same duration. This is because investors consider this kind of debt safer, less risky.

Investors can make an idea on how risky is buying in a particular Government Bond, looking at Credit Ratings.

Investors who want to build a well-balanced portfolio, should consider to keep a quote on their money in risk-free assets. Government Bonds with a AAA Credit Rating, or issuers like Germany or The United States, are usually considered the very risk-free.

In some countries, investing in domestic Government Bonds, or in a Government belonging to a white-list, can ensure tax exemption or reduction.

In this website you can find updated Government Bonds yields. In order to exchange them in the market, you can ask your broker or bank or financial provider.