There are two major covenants in the Bible. They are described as the Old and New Covenants, also known as the Old and New Testaments. The Old Covenant was the law of God given through Moses. The New Covenant is the grace of God working in us (Philippians 1:6; 2:13). Believers enter the New Covenant through faith in our Lord Jesus Christ.
There are obvious differences between the Old and New Covenants. The Old Covenant was fulfilled in the perfect obedience of Christ (Matthew 5:17). The New Covenant revealed Christ in the Gospel. The Old Covenant confirmed the curse of sin, resulting in Christ crucified for our sins (Galatians 3:10). The New Covenant confirms the Gospel of Christ taking away all our sin (1 John 1:7). Christ is our Shepherd in the everlasting covenant (Hebrews 13:20-21).
Charles Spurgeon wrote, "But if God enters into covenant with sinful man, he is then so offensive a creature, that must be on God's part an act of pure, free, rich, sovereign grace. When the Lord entered into covenant with me, I am sure that it was all of grace, nothing else but grace."
The New Covenant brings the grace of God in Christ. Spurgeon described it as "an act of pure, free, rich, sovereign grace." It's pure grace because it's all of grace. It's free grace because it's the gift of God for believers. It's rich grace, because God's mercy in Christ paid our sin debt in full. It's sovereign grace, because only God Almighty can give it to us. We enter the New Covenant by grace through faith in Christ (Ephesians 2:8-10)).
