Treasury Bond (T-Bond) Definition
A Treasury Bond (T-Bond) is a fixed-interest government debt security with a maturity of more than 10 years. T-bonds come with a promise by the U.S. government to pay periodic interest payments until maturity, where the face value is also paid to the bondholder.
Treasury Bond (T-Bond) Key Points
- T-Bonds are issued by the U.S. Department of the Treasury.
- They offer a fixed interest rate (also called a coupon rate) and pay interest twice per year.
- The maturity period of T-bonds is usually 20 to 30 years.
- T-bonds are considered to be a safe and secure investment as they are backed by the full faith and credit of the U.S. government.
- They can be purchased either directly from the U.S. government or through a broker.
- T-Bonds are a popular investment tool for retirement planning purposes.
Who issues Treasury Bonds (T-Bonds)?
T-Bonds are issued by the U.S. Department of the Treasury. They are sold to finance the country’s spending needs and to help regulate the amount of money in circulation.
What is the purpose of Treasury Bonds (T-Bonds)?
The purpose of T-Bonds is to raise money to run the country’s operations, fund infrastructure projects, and service national debt. They also give consumers a way to invest their money in a secure and reliable manner with a guaranteed return.
When are Treasury Bonds (T-Bonds) issued?
T-Bonds are generally issued in auctions held by the U.S. Department of the Treasury. These auctions occur regularly at fixed intervals, typically quarterly.
Where can Treasury Bonds (T-Bonds) be purchased?
Investors can purchase T-Bonds directly from the U.S. Treasury during the auction process or on the secondary market from a broker or bank.
Why invest in Treasury Bonds (T-Bonds)?
Investing in T-Bonds can be a good option for those looking for a form of risk-free investment. It is particularly attractive to conservative investors and those planning for retirement due to its guaranteed return.
How are Treasury Bonds (T-Bonds) values determined?
The value of a T-Bond is determined by several factors such as prevailing interest rates, supply and demand, inflation expectations, and the overall economic and geopolitical conditions.
