Kierstead

The U.S. federal government issues its own bonds from the treasury and from several government agencies. Those developing in less than one year are called T-bills. Bonds that develop in one to 10 years are T-notes, and those that take more than 10 years to grow are treasury bonds. Sometimes, you don't have to pay state or local income taxes on the interest they make.

Munis financing things like healthcare facilities, schools, power plants, streets, office buildings, airports, bridges and so on. Municipalities typically provide bonds when they need more cash than they collect through taxes. The great thing about local bonds is that you do not have to pay federal earnings taxes on the interest they earn.