There are many kinds of bonds but with distinctive purposes and risk profiles. As such, there are:
1. Government Bonds: These bonds are from national governments. Because it is always possible for a government to raise funds either by taxing its citizens or by printing money to service that debt, government bonds happen to be very low in risk. The most famous examples of U.S. treasury bonds come in various maturities. There are what are called Treasury bills, which are short-term, and other issues have medium-term maturities called Treasury notes while the long-term is called Treasury bonds.
2. Municipal Bonds: These are issued by local or state government and raised funds for public projects such as schools, highways, and hospitals. In most cases, these bonds offer tax-free interest income for investors, especially in the U.S. These also come under two types – general obligation bonds, which are guaranteed by the taxing power of the issuer, and revenue bonds, guaranteed by certain revenues like tolls or taxes.