Longer-term bonds generally offer higher interest rates because they lock in lenders' money for a decade or more. Make the yield, or total return, more sensitive to movements in interest rates. These bonds are typically sold with a call or redemption clause, which allows the issuing company to redeem them after the first 10 years (for a longer-duration bond) if interest rates are lower. This allows them to pay off your bond with funds from a new, cheaper bond. (Source: WSJ, More Ways Bond Can Bite You, May 5, 2014) The second category is risk; Investment grade bonds are issued by companies that are unlikely to default. Most corporate bonds are investment grade. They are generally very attractive to investors who want a higher return than they can get with Treasuries, and are actually still quite safe. These are rated at least Baa3 by Moody's and at least BBB- by Standard & Poor's and Fitch Ratings. High-yield bonds, also known as junk bonds, offer the highest yield. However, this is because they are the riskiest. In fact, their rating should scare you: “not investment grade”. This means that they are considered purely speculative. They are rated B or lower. (Source: “Types of Corporate Bonds”, HJ