Treasuries (Bills, Notes, and Bonds)

The United States government issues several different kinds of bonds through the Bureau of the Public Debt, an agency U.S. Department of the Treasury. Treasury debt securities are classified according to their maturities:

Treasury Bills
Treasury bills (T-bills) are debt obligations of the U.S. Government and are backed by the Government’s full faith and credit. A bill is a short-term investment issued for a year or less. Investors buy bills at a discount from par (or "face") value. The difference between the purchase price and what the investor receives at maturity is interest.

The interest rate of T-Bills is determined at each auction, depending on what bidders are willing to pay. T-Bills do not make interest payments, however. Instead, they are purchased at a discount to face value. They are the only Treasury securities that sell at a discount.

Use Treasury Bills to:

U.S. Treasury Notes
Treasury notes (T-Notes) earn and pay a fixed rate of interest every six months until maturity. Fixed-principal notes are issued in terms of 2, 3, 5, and 10 years. You can buy Treasury notes directly from the U.S. Treasury or through a bank or broker.

Use Treasury Notes to:

Treasury Bonds
The Treasury Department stopped issuing fixed-principal Treasury bonds, sometimes called T-Bonds, in October 2001. Nonetheless, many are still unredeemed and earning interest, with a significant number of years remaining until maturity.

Treasury bonds earn and pay a fixed rate of interest every six months until they mature. Bonds are a long-term investment, maturing in up to 30 years.

Use Treasury Bonds to:

Contact a LPL Investment Consultant to go over your options for treasury prodcuts.

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