Month End Glossary

Treasury Notes (T-Notes)

Treasury Notes (T-Notes) are U.S. government debt securities with maturities ranging from 2 to 10 years, offering semi-annual interest payments.

Treasury Notes, often referred to as T-Notes, are a type of debt security issued by the United States Department of the Treasury to finance government spending. They have maturities ranging between two and ten years, making them an intermediate-term investment option. Every T-Note pays interest on a semi-annual basis based on a fixed Coupon Rate, and the principal amount is repaid to the investor upon maturity.

For example, an investor may purchase a 5-year Treasury Note with a principal value of $1,000 and an annual interest rate of 2%. The investor will receive interest payments of $10 twice a year for five years, after which they will also receive the $1,000 principal back. This regular stream of income is one of the reasons Treasury Notes are popular among investors seeking a balance between risk and return. T-Notes are also considered safe investments as they are backed by the full faith and credit of the U.S. government.

Treasury Notes trade in the secondary market, and their yield varies depending on current economic conditions and interest rates. They are often compared to other government securities such as Treasury Bills (short-term) and Treasury Bonds (long-term).

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