Government bonds are debt securities issued by a government to raise funds for various purposes, such as infrastructure development, social welfare programs, or to cover budget deficits. They are considered low-risk investments, as they are backed by the full faith and credit of the issuing government. Bonds are typically issued with a fixed interest rate, known as the coupon rate, which is paid to bondholders at regular intervals, usually semi-annually.
Government bonds offer several benefits to investors. They provide a steady stream of income through regular interest payments, and they are generally considered a safe investment due to the backing of the issuing government. Bonds can also help to diversify an investment portfolio, reducing overall risk.