Month End Glossary

Treasury Bonds (T-Bonds)

Treasury Bonds (T-Bonds) are long-term, fixed interest rate securities issued by the U.S. Department of the Treasury to finance government spending.

Treasury Bonds (T-Bonds) are a type of government security issued by the U.S. Department of the Treasury to help fund government operations and projects. These bonds have a maturity period of more than 10 years, with the maximum being 30 years, and pay a fixed interest rate semiannually to the bondholders.

Investors consider Treasury Bonds to be one of the safest investments as they are backed by the full faith and credit of the U.S. government. In return for this safety, these bonds typically offer a lower yield compared to other types of investments, such as corporate bonds or stocks, but they provide stability and predictable income over time.

For example, a Treasury Bond with a 20-year maturity and an interest rate of 3% would pay its holder semiannual interest payments, and upon maturity, it would return the full face value of the bond. Investors, along with other financial instruments like Treasury Bills and Treasury Notes, might use Treasury Bonds within a diversified investment portfolio for long-term financial goals, such as saving for retirement.

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