US Treasury Notes
What are US Treasury Notes?
A U.S. Treasury note is a government debt security that has a fixed interest rate and a maturity from one to ten years.
Treasury notes may be bought either directly from the U.S. government or through a U.S. bank. In buying Treasury notes 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 Notes
Expert investors consider U.S Treasury notes as a popular investment. Interest payments on these futures (notes) are made twice each year until maturity. The income for interest payments is taxed federally.
Risks of US Treasury Notes
U.S. Treasury notes are seen as an extremely 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.