What it is
Government bonds are debt securities issued by the national government through the Bureau of Treasury. They are also known as Treasury bonds or sovereign bonds.
When you invest in government bonds, you are essentially allowing the government to borrow money from you for things such as building roads and constructing schools.
You earn interest on the money you lend the government, at a fixed annual rate. This payment happens through coupons, which you will receive on a specified schedule
Government bonds have a maturity, which is the time when you will receive the bond’s face value. After maturity, you will no longer receive the interest payments.
What it means for you
Investing in government bonds is a way for you to earn through consistent, scheduled payments while also being a part of nation-building.
Because the government is backing these securities, the chances that you won’t receive the interest payments or get the face value of the bond back are low.
