When I was asking about trading on the stock exchange before someone said that bonds were the safest. But what are corporate bonds and how do they compare to government bonds thanks?

maggie9

Corporate bonds are basically bonds issued by companies - while government bonds are issued by governments.

Government bonds tend to be safer, but also lower yields with that.

Company bonds can offer more - there's a wide range of ratings and yields, according to the type of company you're dealing with.

One of the good thing about corporate bonds, though, is that they tend to be less risky than stocks, as companies are supposed to pay off their debts before handling it's obligations to sharehoders.

Even still, that doesn't mean to say that company bonds can't default, and start-ups are especially at risk of this, though they'll usually offer higher yields to compensate for this.

Make sure you research the companies you might figure on taking a company bond out on. Sure you get protection over stocks but when a company goes belly-up the creditors aren't guaranteed to get their monies back either, just first to be disappointed.

As any sector, research, do the math, gauge the risk vs benefits. Some company bonds offer higher risk with lower returns than some equities.