Essentially, government savings bonds are IOUs, or loans you are giving to a company, city, state or federal government. In return, you'll receive interest based on the type of bond purchased and current government bond rates. In the investing world, US government bonds are a safe, risk-free option that can balance your portfolio.

When researching government bonds for sale, it's important to understand the specific types available—including municipal bonds, corporate bonds, and government bonds—as they have varying risk levels. In addition to types, you'll also want to assess the following considerations to decide what government bonds are right for you.

1. The "face value" of a government bond is the value shown on the certificate. This is the amount the bond holder will receive when it reaches maturity.

2. The "coupon rate" refers to the annual interest rate accruing on a US savings bond, for example.

3. Once a government savings bond reaches "maturity," the issuer is responsible for paying back the bond holder the face value.

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Learn more government bonds basics at well-known financial websites

To the new investor, a US savings bond may not be a first choice in investments, simply because information regarding stocks is usually given more prominence than bonds. Still, there is a great deal of bond information to be found on many popular financial websites, from articles about foreign government bonds to step-by-step tutorials covering US government savings bonds.

I recommend: The Motley Fool is a terrific resource for easy-to-understand bond information for the new investor. Financial giant Morningstar offers a full tutorial on government bonds, complete with a follow-up quiz. Investopedia also provides a complete "Bonds Basics" tutorial for beginners.

Look for information on government bonds at websites geared toward your demographic

Some of the best advice you may discover on buying treasury bonds could just be found on a parenting website. Often, a website geared toward a specific demographic will tailor its articles and advice for its audience, which could result in a better investment match for you.

I recommend: AARP maintains an entire section of financial planning resources, with an excellent article explaining bonds. As with many women-focused websites, iVillage doles out money advice, including an article on buying bonds.

Focus on US government savings bonds and treasury bonds

The two most well-known government bonds are the US savings bond and treasury bonds. These can be easily purchased on the Internet and are often focused on in bond articles. These are the most commonly purchased bonds and are great for beginning investors.

I recommend: The SEC (Securities Exchange Commission) website has a concise summary of saving bond types. A more thorough explanation of US savings bonds can be found on the Investment FAQ website. Finally, the website not to miss is TreasuryDirect, where you can not only learn about treasury and savings bonds, but also buy them.

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• •  Next time you're trying to come up with a gift for the person who has everything, consider US government savings bonds. Children may not find them as exciting as toys, but an adult may very well appreciate the promise of extra funds.

Unlike stocks, which represent equity ownership, bonds represent debt. This may sound like a risky investment; but in the case of government bonds, it's advantageous, since debt holders are prioritized over shareholders when it comes to getting paid. Therefore, government bonds are a secure place to invest your money.

There are various types of bonds to consider when investing. The US savings bond, however, is by far the safest investment. For this reason, the government savings bond should definitely be a part of your portfolio. Other advantages of the US savings bond include:

1. Government bonds, i.e. treasury bonds, are “risk free,” because the government is responsible for paying you back.

2. Government bond rates outperform stocks in certain economic conditions, such as a recession.

3. US government bonds offer security to certain types of investors, such as retirees.

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Choose US government savings bonds over savings if you have time to let the bond mature

Banks are safe, but so are US savings bonds. The difference is in the interest rates, as well as the accessibility of your money. If you can afford to invest a percentage of your money for a long period of time, you'll receive a higher interest rate with US government bonds over a savings account. Appropriate reasons to invest in bonds include saving for a child's college education or retirement.

I recommend: I recommend The Federal Reserve Board for additional information regarding investing in the US savings bond.

Explore the various types of bonds available to investors

Municipal bonds, government I bonds and junk bonds are just a few bond options available to investors. They are not all one and the same, however. If you are looking for safe and conservative, then governments bonds are appropriate. Be cautious of high risk options, such as Junk bonds.

I recommend: I recommend InvestinginBonds.com and Wells Fargo for a listing of different bonds, including US government savings bonds.

Include government savings bonds in your investment portfolio

You really cannot go wrong by including US government bonds in your portfolio. You can also better calculate your return because of the predictability of US government savings bonds. For retirees, this is a welcomed advantage. They can calculate what their expected earning would be on a US treasury bond.

I recommend: Check out information provided U.S. Securities and Exchange Committee to see what they have to say about asset allocation. It offers the brief explanation on stocks versus bonds.

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• •  There is a rule of allocation in the investing industry. Basically, you subtract your age from 100. If you're 35 years old, then it's considered wise to invest 65% of your assets in stocks and 35% in US savings bonds and cash. With this formula, you gradually increase your low-risk holdings as you near retirement.

Government bonds education and training is essential for novice employees of any financial or business consulting company. Even if your employees have completed some formal course work in finance, they'll still need to gain a deeper understanding of bonds as a viable investment source that comes from hands-on experience.

The US savings bond, its history and characteristics, is an excellent starting place for novices. Guide your employees' research by suggesting they pay particular attention to why bonds are ideal components of a diversified investment portfolio. Here are some suggestions for assisting your new hires in learning the basics of government savings bonds:

1. Give new hires background reading materials on US government savings bonds.

2. Direct your employees to learn about essential investment considerations before they can buy US government bonds for your clients.

3. Get your new hires started on the buying and selling of government bonds.

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Start new hire government bonds education and training with an introduction to bonds

Your employees must start by learning the different types of bonds, such as Treasury bonds, municipal bonds and corporate bonds, as well as when these bonds are issues and by whom.

I recommend: Investopedia provides tutorials that explain and compare the different kinds of government bonds. Read through the step by step explanation of bond basics given by Investing Bonds.com. AARP's website will help your employees understand why bonds are a good investment choice for those living on a fixed income.

Learn the key government bond investment considerations

Now that you understand bond characteristics, you must help your clients decide which bonds are best for them. These decisions depend upon whether they want to diversify, whether they like to take risks or play it safe and how much time they have before retirement.

I recommend: Exxon Mobil offers financial counseling in making bond investment decisions to its employees on a website that is accessible to the general public. B Net Business Directory explains how essential it is to know about bond yield before making an investment decision.

Find out how to buy and sell US government bonds

Learn the most reliable sources of bonds, which bonds are available and the different payment options for government bonds.

I recommend: Treasury Direct.gov is the government's official website for selling bonds to you directly online. Check out Market Watch archived articles that provide tips on buying bonds that were helpful to investors in the past. Read the frequently updated articles at Money News that contain more timely tips on buying bonds.

Get professional training in US government bonds trading and analysis

While most hands-on training in bond trading and analysis happens on the job, there are training courses for bond professionals to advance in the field.

I recommend: FINRA, the regulatory body for the securities industry, offers an extensive menu of online training courses every year. Euromoney Institutional Investor's Bond School is a two-day course in New York that goes through the pricing and rating of Treasuries and other US government bonds.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  When it comes to government bonds for sale, 'TIPS', also known as Treasury Inflation Protected Securities, have gained in popularity because there is no transaction fee, you get many bonds with just one purchase and they can be bought and sold for indiscriminate amounts.

Government bonds offer a wide variety of risk profiles for investors. From risk-free Treasury bonds to highly risky bonds issued by foreign governments in emerging markets, government bonds can be an excellent addition to anyone’s investment portfolio. There are several terms that you must be familiar with before venturing into this world, however. The coupon paid by a bond, the bond’s price and the bond’s credit rating are all critical bits of information you’ll need before buying a bond.

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Treasury bonds

Treasury bonds are bonds issued by a government denominated in the country's own currency. So, a bond issued by the U.S. government in U.S. dollars is a treasury bond. They are considered to be risk-free bonds because the government can always print money to meet the obligation represented by the bond.

I recommend: Treasury Direct, a branch of the U.S. Treasury, has a good discussion of how U.S. Treasury bonds work.

Bond price

The amount of interest the bond will pay determines the bond price along with how long the bond will last, and the current interest rates on other similar investments. The bond price is usually quoted as a percentage, so that the buyer can determine an exact price depending on the amount of bonds the buyer wants.

I recommend: Fidelity Investments has a very comprehensive description of bond price and the factors that affect it.

Coupon

When you buy a bond, you receive a period payment called a coupon. A coupon is the interest paid on a bond to the bond owner. Each bond has a coupon rate, and the coupon rate tells you the cents received per dollar of bond owned. Bonds with higher coupon rates tend to command higher prices.

I recommend: Check out InvestorWords.com for an easy-to-understand definition of a coupon along with definitions of terms that will help you further understand coupons.

Maturity date

Unlike stocks, almost all bonds come with a maturity date. On the maturity date, the bond owner receives the final coupon payment and the principal repayment. Bonds, when issued, typically have decades to go before the maturity date. The maturity date is important because bonds that are father from maturity are riskier investments.

I recommend: The information on Investopedia about maturity date is worth looking into as well as related terms that may be helpful.

Foreign bonds

A foreign bond is a bond issued by a foreign government in a foreign country. For example, if the German government issued bonds in the U.S. denominated in U.S. dollars, then that would be a foreign bond. These are risky, in that the foreign government cannot print another country's currency.

I recommend: TheFreeDictionary has a very good discussion of foreign bonds.

Credit rating

A bond's credit rating is an indication of the bond's risk. Bonds with a high credit rating are less likely to go into default and bankruptcy than bonds with a low credit rating. Companies offer credit ratings based on several elements of the bond issuer, be it a company or a country.

I recommend: StreetAuthority has a clear definition and a complete set of examples about credit rating.