general obligation bond

finance

Written by

The Information Architects of Encyclopaedia Britannica

Last updated

July 16, 2026

Quick Summary

A general obligation bond is a type of municipal bond that is backed by the taxing power and creditworthiness of the issuing governmental unit. This means that the issuer can use various tax revenues to repay the bondholders.12

Unlike revenue bonds, which are repaid from the income generated by a specific project (like a toll road or an airport), general obligation bonds are considered safer because they are backed by the full faith and credit of the issuer. This often results in lower yields compared to revenue bonds. Municipal bonds, including general obligation bonds, allow investors to support local community projects while earning income, often with tax advantages.23

Summary created from Britannica articles using AI. AI can make mistakes, so verify using Britannica articles.

3 Britannica Sources

Ask Britannica AI about this topic

Britannica doesn't have a full article on this topic, so we've curated a list of our relevant coverage.

revenue bond
Unlike general obligation bonds, which carry the full faith and credit of the issuing agency and are repaid through a variety of tax revenues, revenue bonds are payable from specified revenues only, usually the revenues from the facility for which the bond was originally issued.
Read More
Unlike general obligation bonds, which carry the full faith and credit of the issuing agency and are repaid through a variety of tax revenues, revenue bonds are payable from specified revenues only, usually the revenues from the facility for which the bond was originally issued.
Read More