Lots to learn and grasp.
The basics:
1. you buy a bond, or buy shares in a bond
fund. You're lending money to the gummint or corporation X or a gov't-sponsored outfit, or maybe a foreign gov't. (These days, I'd stay domestic.)
2. In the case of a bond
fund, you're buying pieces of hundreds of bonds, and the yield (interest payments) will vary a bit from month to month or from quarter to quarter. Why? Because individual bonds mature, and there is some turnover in the fund.
3. You will receive a pre-offered, fixed amount of interest, on
individual bonds. Some bonds are called "zero coupon" bonds. A "zero" pays you nothing
along the way to maturity, but your profit
compounds, and you get paid
at the maturity of the bond.
4. Investment Grade bonds carry less risk than "junk" bonds. The easiest way to own 'junk' is through a fund. My bond portion of the portfolio is one-third of my total, and most of that is "junk." But "junk' is less junkier than in days gone by. The euphemism for 'junk' is 'high yield.'
5. Established, industrialized countries are the safest bets. USA, for one. Currently, the USA gov't, through Treasury bonds, has the highest rates available you can get in the safest, Investment-Grade universe: a bit less than 5%. ('Junk' is offering 8-9% lately.) You can buy Treasuries through "TreasuryDirect." I never do. The website is clunky and user-unfriendly.
6. Traditionally, bonds were the safe portion of your portfolio and provided
ballast during rocky times. These days, the profit from bonds can rival what you can get out of stocks. Be prudent. I would not even go near Emerging Market bonds now. And my 'junk' is all
domestic.
"Break a leg!"
*EDIT:
you said: "I want fixed investments that are safe ( I know nothing is garuanteed) and that I dont need to pay taxes on. Municipal Bonds? What are rough rates of return and are they mostly fixed equities or variable? I kinda want to stay on the safer fixed side with this money."
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Yes, Munis are federally tax free. If the Munis are from the State where you live, you won't pay State tax on the interest, either. But because of that very thing, the interest rate you can get on Munis is very much lower than on a taxable bond. Munis make sense if you are in a medium-to-high tax bracket. Not for me.