Corporate bonds more often than not pay higher rates of interest than other bonds such as municipal bonds as they tend to be a lot riskier. The reason being is that the investor is backing an individual or group of corporations, rather than a government or state approved project or organisation.

Corporate bond yield has quite a wide spectrum due to the many financial issuers that can be involved. A large, successful corporation may have bonds with a high investment grade value and rating, perhaps AA. However, with that rating comes a relatively low yield but a considerably lower risk of default. Comparatively speaking, high yield corporate bonds that are most commonly found in start-ups carry a higher risk but a greater value of reward.