What are Treasury Bonds (T-bonds)?
Overview of Treasury Bonds
Treasury bonds, commonly known as T-bonds, are fixed-rate, long-term debt securities issued by the United States government. These bonds have maturities ranging from 20 to 30 years.
Types of Treasury Bonds
In India, the Central Government issues treasury bonds and bills (dated securities), while State Governments only issue bonds (dated securities). Treasury bonds have maturities of 10 to 30 years and typically pay a fixed coupon rate every six months.
Features of Treasury Bonds
Treasury bonds offer investors the following features:
- Fixed interest payments until maturity
- Option to hold until maturity or sell before maturity
- Backed by the full faith and credit of the US government
- Low risk compared to other investment options
Benefits of Investing in Treasury Bonds
Investing in Treasury bonds provides investors with several benefits:
- Stable income stream from fixed interest payments
- Protection of principal due to government backing
- Diversification for investment portfolios
- Liquidity as bonds can be bought and sold in the secondary market
Conclusion
Treasury bonds (T-bonds) are a valuable investment option for investors seeking stability, regular income, and low risk. Backed by the US government, these long-term debt securities provide investors with a secure and reliable investment choice.
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