A government bond is a tradable instrument issued by the Central/State government. This often helps governments raise funds for their expenses. These bonds are considered to have a lower risk than bonds or stocks issued by companies because of the backing of the government. Thus, they often have lower interest rates than company-issued bonds. The bonds have a maturity period which may or may not have interest payments. At the end of the maturity, the lender receives the money back (along with the interest payment).
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