Federal Government Bonds

Treasuries, or federal government bonds, are a good option for people in high tax brackets who can use a tax break. Any interest earned on a treasury bond is tax-free from both state and local taxes.

Because the federal government is not likely to go bankrupt, treasuries are a very stable type of bond. This means that they also offer low interest rates. Bond investing in treasuries is safe, but not as lucrative as other bond investments.