I'm surprised no one has mentioned the TF swords. They are fairly cheap, and do a good amount of damage, with special perks:
Fiery Sword == 8 damage + Fire Aspect 1
Ironwood Sword == 6 Damage + Knockback 1
Steeleaf Sword == 7 Damage + Looting 2
Knightly Sword == 7 Damage + extra damage to armored targets
Fiery Sword == 8 damage + Fire Aspect 1
Ironwood Sword == 6 Damage + Knockback 1
Steeleaf Sword == 7 Damage + Looting 2
Knightly Sword == 7 Damage + extra damage to armored targets