Buying Australian government bonds, also known as Australian Treasury Bonds or Commonwealth Government Securities (CGS), involves investing in debt securities issued by the Australian government. These bonds represent a loan made by investors to the government, with the government promising to repay the principal amount at maturity and make regular interest payments during the bond’s term.
Investing in Australian government bonds offers several benefits. They are considered low-risk investments as they are backed by the full faith and credit of the Australian government, which has a strong track record of meeting its financial obligations. Government bonds also provide a steady stream of income through regular interest payments and can help diversify an investment portfolio, reducing overall risk.