The bank will lend out the extra reserves and keeping some of the necessary reserves on hand. The money supply is grown when such loan is made.
Bonds can be classified into five categories: corporate, municipal, agency, savings, and Treasury. Each sort of bond features its own vendors, goals, purchasers, and risk-to-return ratios. Bond-based instruments, such as bonded mutual funds, can also be purchased if you wish to profit from bonds.
Savings bonds, agency bonds, municipal bonds, corporate bonds, and treasuries are some examples of bonds. Treasuries are the safest bonds, although they pay minimal interest and are typically sold at auction (which can be among the most risky, depending on the company).
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