US Treasury Bonds
What are US Treasury Bonds?
A U.S. Treasury bond (T-Bond) is a fixed-interest future, U.S. government debt security with a maturity that is more than 10 years.
Treasury bonds make interest payments every six months. The income that holders receive is taxed at the federal level. Treasury bonds are issued with a minimum denomination of $1,000 USD.
In buying U.S. Treasury bonds directly from the government, you can either put in a competitive bid or a non-competitive bid. Competitive bids mean you specify the exact yield you want (although this does not mean that your bid will be accepted). With a non-competitive bid, you accept whatever yield is determined from an auction.
Uses of US Treasury Bonds
Expert investors consider U.S. Treasury bonds as a popular investment. They may be bought either directly from the U.S. government or through a U.S. bank. Interest payments on these notes are made every twice each year until maturity. The income for interest payments taxed federally.
Risks of US Treasury Bonds
U.S. Treasury bonds are seen as a safe investment. The notes are issued by the government and as such, they are government backed. With this low risk comes a low return on investment.